For starters, Germany was forced to accept full responsibility or causing all the loss and damage during the war (the other members of the Central Powers signed treaties containing similar articles).
Which was grossly unfair because in reality Germany and its allies (first and foremost, the Austro-Hungarian empire) were the victims of the war planned and ignited by Serbia, Russia and France with tacit support from Great Britain.
This fact was made public at the Salonika Trial which resulted in (well-deserved) death sentence for Colonel Dragutin Dimitrijevic – the mastermind of the Sarajevo assassination and, therefore, of the outbreak of World War I.
The treaty stripped Germany of 65,000 km2 of territory inhabited by 7 million people. It also required Germany to give up the gains made via the Treaty of Brest-Litovsk and grant independence to the protectorates that had been established.
To compensate for the destruction of French coal mines, Germany was to cede the output of the Saar coalmines to France and control of the Saar to the League of Nations for fifteen years.
The treaty (obviously) returned the provinces of Alsace-Lorraine to France by rescinding the treaties of Versailles and Frankfurt of 1871 as they pertained to this issue.
In Eastern Europe, Germany was to recognize the independence of Czechoslovakia and cede parts of the province of Upper Silesia to Poland. The province of Posen (now Poznan), which had come under Polish control during the Greater Poland Uprising, was also to be ceded to Poland.
Eastern Pomerania was transferred to Poland so that the new state could have access to the sea (it became subsequently known as the Polish Corridor). The East Prussian Soldau area was transferred to Poland as well.
Memel (now the Lithuanian city of Klaipeda) was to be ceded to the Allied and Associated powers, for disposal according to their wishes. In addition, Germany was to cede the city of Danzig and its surrounding area, including the delta of the Vistula River on the Baltic Sea, to the League of Nations to establish the Free City of Danzig.
The Treaty forced Germany to pay completely unreasonable reparations to certain countries that had formed the Entente powers (ostensibly to compensate for the damage caused by its military activities during the Great War).
In 1921, the total cost of these reparations was assessed at the insane 132 billion German marks (roughly equivalent to US $442 billion in 2018). Unreasonable and even insane because these reparations all but destroyed the German economy (already more than fragile at that time) and thus paved the way for the Nazis to come to power and ultimately to ignite the Second Great War. Not exactly the outcome that victorious Allies had in mind when they forced Germany to sign the Treaty of Versailles.
The Treaty imposed extensive and humiliating (to put it mildly) restrictions on German armed forces. Germany was to demobilize sufficient soldiers by 31 March 1920 to leave an army of no more than 100,000 men in a maximum of seven infantry and three cavalry divisions.
The German General Staff had to be dissolved. Conscription was to be abolished making the Reichswehr an all-volunteer armed forces. The Rhineland was to be demilitarized, all fortifications in the Rhineland and 50 kilometres east of the river were to be demolished and new construction was forbidden.
Germany was prohibited from the arms trade, limits were imposed on the type and quantity of weapons and prohibited from the manufacture or stockpile of chemical weapons, armored cars, tanks, military aircraft and submarines.
The German navy was allowed six pre-dreadnought battleships and was limited to a maximum of six light cruisers, twelve destroyers and twelve torpedo boats. The manpower of the navy was not to exceed 15,000 men (including no more than 1,500 officers and warrant officers).
To ensure compliance with the Treaty, the Rhineland and bridgeheads east of the Rhine were to be occupied by Allied troops for fifteen years – with provisions for staged withdrawal if Germany had not committed aggression. If Germany reneged on its obligations, the bridgeheads would be reoccupied immediately.
Now why on Earth would the Allies commit such a monumental blunder? The first reason was, obviously, purely political. The infamous Article 231 (the War “Guilt clause”) was written specifically to shift responsibility from real culprits (France and Great Britain) to Germany and Austro-Hungarian Empire (actual victims of conspiracy put together by Serbia, Russia and France). Three decades later the same countries (plus the Soviet Union) will use the (in)famous Nuremberg Trial to perform a very similar cover-up.
Second, the Allied nation seriously believed that the next Great War could only be caused by the land conflict between Germany and France. And thus the best way to prevent it is to sufficiently weaken Germany so that it would never, ever again be a potent military rival to France.
While the Allies were highly successful in their first endeavor (the overwhelming majority still believes the blatant lie of “German responsibility” for the outbreak of the Great War), in their second venture they failed miserably.
The first reason for this abject failure was money. British, American, French and all European businesses wanted to expand. Consequently, they needed markets for their goods. Large, fast-growing markets that can consume large quantities of their products.
Therefore, European and American businesses wanted Germany to become a rich, prosperous and economically powerful nation so that it can buy the maximum possible amount of their goods.
So they put a significant pressure on their governments that ultimately forced them to relax the terms of the Treaty (e.g., reparations). And to look the other way when Germany began more and more boldly violate restrictions imposed by the Treaty.
For the same reason they forced their governments to look the other way when the Soviet Union will commence a daring project of building the mighty military-industrial machine that had but one objective. Invade, conquer and destroy Europe and the whole Western (and not just Western) civilization and replace it with the alternative civilization – global Union of Soviet Socialist Republics.
Which actually brings me to the second reason why the Allies failed to permanently weaken Germany (and thus to prevent it from provoking the Second Great War).
Just two years after the Treaty of Versailles was signed (after the Red Army almost conquered Poland and then Germany), the Allied Powers suddenly realized that (1) the Bolshevist Russia is, indeed, clear, present and existential threat to Europe and (2) Germany is the only country that can stop the Bolshevist offensive.
Consequently, they had no other choice but to look the other way and to allow Germany to become a mighty economic, political and military power. Again.
Unfortunately for the Allied Powers, the German people had other ideas about their future than becoming cannon fodder for France, Great Britain and other European nations.
They wanted revenge. And now they had someone that in twenty years will make their dreams of revenge come true.