The Paris Peace Settlement of 1919, culminating in the Treaty of Versailles, involved key figures Clemenceau, Wilson, and Lloyd George, each with differing visions for post-WWI peace. The treaty imposed severe penalties on Germany, including substantial reparations and territorial losses, leading to widespread discontent and the notion of a 'stab in the back' among Germans. The harsh terms ultimately contributed to political instability in Germany and set the stage for future conflicts.