Versailles Treaty Peace treaty signed in June 1919 ending World War I The treaty set up the League of Nations, reduced German territory by returning parts to France, Belgium and Denmark, creating Czechoslovakia, Poland, Hungary, Lithuania and established Danzig as a "free city". According to the treaty Germany was disarm, abolish universal service, keep an army not larger than 100,000 men and a small navy. These and other punitive measures created severe conditions in Germany.