Wilson had passed through the dangerous aftereffects of his stroke and achieved a slight recovery by the end of 1919, but for the balance of his term, he remained a sick man, his physical constitution, psyche, and sense of reality shattered. He continued to function on a low level, but he could sit up or concentrate upon a subject for only short periods. He also suffered from severe changes in mood and from some paranoia. Consequently, Wilson was incapable of giving leadership to his party, to Congress, and to the people during one of the most critical periods in American history.
The myth still persists that Edith Bolting Wilson, Wilson's second wife (his first wife, Ellen Louise Axson Wilson, had died on 6 August 1914), ran the presidential office after his first stroke. Edith Wilson, in consultation with Dr. Grayson, did determine to a large degree the persons whom Wilson saw and for how long. She also took important state papers into Wilson's room, read them to him, and recorded her husband's instructions in the margins of the documents. But she neither knew how to serve as an acting president nor wanted to be one. She was interested only in the health and happiness of her husband, whom she worshiped. Mrs. Wilson did make two decisions of momentous importance: in mid-October 1919 she vetoed a plan by Dr. Grayson and his chief consultant, Dr. Francis X. Dercum of Philadelphia, to make a complete disclosure of Wilson's condition. Later, in January 1920, Dr. Grayson persuaded Wilson to resign, and Mrs. Wilson blocked this initiative.
Power in these circumstances fell to Tumulty, who assumed general oversight of the executive office, and to the various departmental heads. Lansing, as the premier of the group, held unauthorized cabinet meetings on his own from October 1919 until Wilson dismissed him on 12 February 1920.
Lansing's successor was Bainbridge Colby, a New York lawyer, appointed on 25 February 1920. The two men presented a study in contrasts. Whereas Lansing was conservative in political outlook, Colby was an advanced progressive who had followed Roosevelt in 1912 and supported Wilson in 1916. Lansing was a professional "realist"; Colby was an idealist and an amateur, at least at the beginning of his incumbency.
When a group of generals led by Álvaro Obregón overthrew Carranza on 8 May 1920, Colby moved at once to mend Mexican-American relations preparatory to a recognition of the Obregón government, but the new rulers in Mexico City were then too afraid of domestic public opinion to come to any understanding with the United States. They deferred serious negotiations until the inauguration of Warren G. Harding.
Wilson seemed to want to wash his hands of European problems after the Senate's second rejection of the Versailles treaty, and the United States government sat on the sidelines while the Allies tidied up the map of Europe. Wilson and Colby also continued the administration's policy of strict noninterference in Russian affairs. The United States, for example, refused to recognize the independence of the new Baltic states of Lithuania, Latvia, and Estonia. Colby coupled the policy of noninterference with one of adamant refusal to recognize the Bolshevik government, on the ground that it did not represent the Russian people.
Departmental heads and Congress met the problems of demobilization without much guidance from the White House. The new attorney general, Alexander Mitchell Palmer, on 8 November 1919, secured an injunction that prevented a nationwide coal strike by the United Mine Workers of America. A federal arbitration commission soon granted most of the miners' demands. Palmer, with an eye on the White House and in response to a mounting fear of Communism, had federal agents, on 1 January 1920, execute a gigantic raid on Communist headquarters throughout the country. It is doubtful if Wilson knew anything about Palmer's raid.
Wilson announced on 24 December 1919 that he would return the railroads to their owners on 1 March 1920 unless Congress instructed otherwise. Congress responded with the Transportation Act of 1920, which affirmed the principle of private ownership but also established comprehensive federal control over all aspects of the railroad business. At the same time, before he left office, Secretary of the Interior Lane was assured of passage of the Water Power and General Leasing acts by Congress in early 1920. Their adoption brought to an end controversies that had worried the Wilson administration since 1913. One of the crowning achievements of the Wilson administration—the Nineteenth Amendment, which conferred the vote upon women—came to fulfillment with ratification of the amendment on 26 August 1920. Finally, Wilson vetoed, on 27 May 1920, a joint resolution ending the war with Germany. A separate peace, he said, "would place ineffable stain upon the gallantry and honor of the United States." (A joint resolution to end the state of war was approved by President Harding in July 1921.) Wilson vetoed, unsuccessfully, the Volstead Act of 1919 for the enforcement of national prohibition under the Eighteenth Amendment. In his last important act as president, he vetoed emergency bills to increase tariff rates and severely limit the admission of immigrants. Congress passed both measures again in May 1921, and the new president signed them.