Narrowly re-elected in 1916, he had full control of American entry into World War I, and his second term centered on World War I and the subsequent peace treaty negotiations in Paris. He based his re-election campaign around the slogan, "He kept us out of war", but U.S. neutrality was challenged in early 1917 when the German Empire began unrestricted submarine warfare despite repeated strong warnings and tried to enlist Mexico as an ally. In April 1917, Wilson asked Congress to declare war. During the war, Wilson focused on diplomacy and financial considerations, leaving the waging of the war itself primarily in the hands of the Army. On the home front in 1917, he began the United States' first draft since the American Civil War, borrowed billions of dollars in war funding through the newly established Federal Reserve Bank and Liberty Bonds, set up the War Industries Board, promoted labor union cooperation, supervised agriculture and food production through the Lever Act, took over control of the railroads, and suppressed anti-war movements. During his term in office, Wilson gave a well-known Flag Day speech that fueled the wave of anti-German sentiment sweeping the country in 1917–18.
In the late stages of the war, Wilson took personal control of negotiations with Germany, including the armistice. In 1918, he issued his Fourteen Points, his view of a post-war world that could avoid another terrible conflict. In 1919, he went to Paris to create the League of Nations and shape the Treaty of Versailles, with special attention on creating new nations out of defunct empires. In 1919, Wilson engaged in an intense fight with Henry Cabot Lodge and the Republican-controlled Senate over giving the League of Nations power to force the U.S. into a war. Wilson collapsed with a debilitating stroke that left his wife in control until he left office in March 1921. The Senate rejected the Treaty of Versailles, the U.S. never joined the League, and the Republicans won a landslide in 1920 by denouncing Wilson's policies.