Through the Early Modern Era there was a long established tradition of *tribute* being paid by the losing side in a war. As wars became larger, longer, and more devastating through the 19th Century, so the tribute gradually became re-imagined as *reparations* for the costs of the war won by the victor. 

However, to make a long story short, The terms of the Treaty of Versailles were so harsh on Germany because the French and Prussian/German governments had been [one-upping each other][1] in war reparation demands since [1807][2], through [1815][3], [1871][4], and finally [1919][5].


  [1]: ftp://www-snde.rutgers.edu/Rutgers/wp/1999-24.pdf
  [2]: http://en.wikipedia.org/wiki/Treaties_of_Tilsit#Franco-Prussian_treaty_.289_July.29
  [3]: http://en.wikipedia.org/wiki/Treaty_of_Paris_%281815%29#Convention_on_Pecuniary_Indemnity
  [4]: http://en.wikipedia.org/wiki/Franco-Prussian_War#Aftermath_and_legacy
  [5]: http://en.wikipedia.org/wiki/World_War_I_reparations