If any president ever felt the burden of history upon him, it was Woodrow Wilson. An academic before he had been a politician, Wilson had studied the history of America's government and written extensively on it. Wilson recognized the historic nature of his 1912 election, as the first native of the South—born in Virginia and raised in Georgia before moving to the North as an adult—to win the nation's top office since before the Civil War. He was also only the second Democrat elected during that period, the other being Grover Cleveland.
Finally, Wilson understood the historic peculiarity of his election and the precariousness of the position in which it placed him. In three-way race, Wilson received only plurality of the popular vote: 42 percent. His biggest margins were in the solidly Democratic South. He would need the southern vote more than ever should he run for reelection, because the split in the Republican party, when Theodore Roosevelt bolted to the Progressives, surely wouldn't be repeated.
These considerations were on Wilson's mind when he convened his cabinet in April 1913. In consideration of the importance of the South in his election, Wilson had filled important cabinet positions with southerners. Albert Sidney Burleson, a Texan, was postmaster general, responsible for the largest part of the federal workforce. In 1896 the Supreme Court had ruled in the case of Plessy v. Ferguson that segregation was not unconstitutional. Since then, segregation had spread throughout the South and indeed in parts of the North. Burleson wanted to apply the Plessy principle to the post office. Burleson claimed that the confusion resulting from separate rules for public and private employment caused unnecessary friction in his department.
Wilson listened but took no action at this meeting. Subsequently he heard from other members of his cabinet. Georgia-born William McAdoo headed the treasury department and thought Burleson's plan made sense there. Joseph Daniels of North Carolina was secretary of the navy and similarly endorsed Burleson’s thinking.
Wilson found himself in a difficult position. While campaigning for president he had met with black leaders and caused them to believe he had the interests of their community at heart. Some of them urged black voters to break with the Republican party, their home since Reconstruction, and vote for Wilson. They certainly would consider themselves betrayed if Wilson followed the advice of Burleson, McAdoo and Daniels.
On the other hand, white southerners, exiled from the executive branch for half a century, would be upset if he rejected the advice of his southern secretaries to do something common in much of the country and that had the approval of the Supreme Court.
Wilson hadn’t taken a strong public position for or against segregation. He considered himself above the crude race-baiting practiced by white southern populist types, but neither did he think workplace segregation was a mortal sin against American democracy. Men and women had their separate spheres, and few people complained. Why not blacks and whites?
Wilson had ambitious plans for his administration. He intended to tackle the trusts, lower the tariff and create a national bank. The progressive moment had come; it might not come again for a generation. He didn't want to get sidetracked by an issue he considered secondary in importance.
And so, without making a presidential announcement, he let the segregationists in his cabinet implement their plans. Black workers in the affected departments were separated from white workers; many lost out on promotion opportunities; more than a few resigned in frustration.
A century later, long after the Supreme Court and the country had changed their minds on segregation, Wilson's acceptance of the segregation of the federal workforce would be seen by some as an unforgivable blot on his reputation. Princeton University, which he had attended as an undergraduate and led as university president, and which had named its school of public and international affairs for him, reversed course and removed his name from the school.
In his own day, Wilson's decision triggered protests from black leaders and black federal workers, but few others. Wilson kept his focus on his domestic reforms, which he accomplished by the end of his first year in office. To the extent he thought about it, he considered his decision on segregation a judicious choice that had paid off.
In his second year, Europe went to war. The conflict pushed domestic issues of all sorts into the background and eventually—after Wilson's reelection, made possible by the still solid Democratic South—drew the United States in. During the war Wilson came to be recognized as a visionary world leader, one who made Princeton proud. Until he didn’t.
You clarified Wilson's thinking regarding the approval of segregating those particular departments. He remained beholden to the southern racism as those votes were needed to win elections. And he seemed a southerner at heart and didn't see any great problem in sticking with the policy. With Blacks serving admirably in WWI a change was coming regarding segregation in the homeland. Warren Harding was not as accomplished as Wilson but he did see beyond the white bigotry that permeated America. Wilson's idealism on international affairs remains a significant contribution in American history.
Also be aware of naming institutions after noted figures. Time and trends can turn on one.