Treaty of Versailles ( 1871 ) The Treaty of Versailles of 1871 ended the Franco - Prussian War and was signed by Adolphe Thiers , of the French Third Republic , and Otto von Bismarck , of the German Empire on February 26 , 1871 . This was a preliminary treaty used to solidify the initial armistice of January 27 , 1871 between the two states . It was later ratified by the Treaty of Frankfurt on May 10 of the same year . The 1871 Treaty of Versailles made the decline of France obvious to the rest of the continent , and at the same time demonstrated the strength of a unified German empire . Paris ' s governing body , the Government of National Defense , initiated the armistice by surrendering to the Germans after the siege of Paris . Jules Favre , a prominent French politician , met with Otto von Bismarck in Versailles to sign the armistice to be put into effect January 28 , 1871 . Adolphe Thiers then emerged as the new French leader as the country began reconstructing its government . Disruption of the French Government . In the first few months of 1871 , German forces experienced several great military successes against the struggling French government , including the capture of the current French emperor , Louis Napoleon of the French Second Empire , at the Battle of Sedan . This caused the collapse of Louis Napoleon ' s empire , which was replaced by the French Third Republic in 1870 . The Government of National Defense served as an interim governing body before the Third Republic could hold elections , and received unfavorable responses from Parisians as it was unable to break the siege . Statesmen evacuated to establish offices in Bordeaux and Tours , which left French government officials unable to communicate , further upsetting the structure of the state and weakening the government . German Unification . While the French government deteriorated , Bismarck succeeded in achieving German Unification on January 18 , 1871 creating the German Empire . King Wilhelm I of Prussia was declared Kaiser of the newly created empire in the Hall of Mirrors in the Versailles Palace . The new German command structure wanted to sign a peace treaty to gain France ' s colonial possessions ; however , Bismarck opted for an immediate truce as his primary reason for war , German unification , had already been accomplished . He was concerned that further violence would render more German casualties and draw French resentment . He was also wary of drawing attention from other European nations , fearing that they might be moved to intervene if the new German state appeared power - hungry . Both sides were eager to sign a treaty by the beginning of February 1871 . Provisions of the treaty . The terms of the treaty included a war indemnity of five billion francs to be paid by France to Germany . The German army would continue to occupy parts of France until the payment was complete . The treaty also recognized Wilhelm I as the Kaiser of the newly united German Empire . Preliminary discussion began on the cession of Alsace and the Moselle region of Lorraine , to Germany . Despite Bismarck ' s objections , Moltke and his generals insisted that the territory was necessary as a defensive barrier . Bismarck opposed the annexation because he did not wish to make Germany a permanent enemy of France . The portion annexed of Alsace - Lorraine was later reduced at the Treaty of Frankfurt , allowing France to retain the Territory of Belfort .