Wilson, the President of the USA, wanted a peaceful post-war settlement and did not think Germany should be forced to pay crippling war costs. He proposed establishing a League of Nations to diplomatically settle disputes and outlined 14 Points for a just peace, including independence for Poland and self-determination for colonies. The Treaty of Versailles imposed harsh terms on Germany, limiting its military, assigning war guilt, and requiring large reparations, which contributed to tensions. The League of Nations was formed but key countries like Germany and the USSR did not initially participate, weakening it.