, 1918, one of the many destroyed French villages where reconstruction would be funded by reparations
In 1914, the
First World War broke out. For the next four years fighting raged across
Asia. On 8 January 1918,
United States President
Woodrow Wilson issued a statement that became known as the
Fourteen Points. In part, this speech called for Germany to withdraw from the territory it had occupied and for the formation of a
League of Nations.
 During the fourth quarter of 1918, the
Central Powers began to collapse. In particular, the German military was decisively defeated on the
Western Front and the German navy
mutinied, prompting domestic uprisings that became known as the
Most of the war's major battles occurred in France and the French countryside was
heavily scarred in the fighting. Furthermore, in 1918 during the German retreat, German troops devastated France's most industrialized region in the north-east (
Nord-Pas de Calais Mining Basin). Extensive looting took place as German forces removed whatever material they could use and destroyed the rest. Hundreds of mines were destroyed along with railways, bridges, and entire villages.
Prime Minister of France
Georges Clemenceau was determined, for these reasons, that any just peace required Germany to pay reparations for the damage it had caused. Clemenceau viewed reparations as a way of weakening Germany to ensure it could never threaten France again.
 Reparations would also go towards the reconstruction costs in other countries, including Belgium, which was also directly affected by the war. British
David Lloyd George opposed harsh reparations, arguing for a smaller sum that was less damaging to the German economy so that Germany could remain a viable economic power and trading partner. He also argued that reparations should include war pensions for disabled veterans and allowances for war widows, which would reserve a larger share of the reparations for the
British Empire. Wilson opposed these positions and was adamant that no indemnity should be imposed upon Germany.
Paris Peace Conference opened on 18 January 1919, aiming to establish a lasting peace between the Allied and Central Powers. Demanding compensation from the defeated party was a common feature of peace treaties. However, the financial terms of treaties signed during the peace conference were labelled reparations to distinguish them from
punitive settlements usually known as
indemnities, which were intended for reconstruction and compensating families who had been bereaved by the war. The opening article of the reparation section of the
Treaty of Versailles,
Article 231, served as a legal basis for the following articles, which obliged Germany to pay compensation and limited German responsibility to civilian damages. The same article, with the signatory's name changed, was also included in the treaties signed by Germany's allies.