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While making the film The Valley of the Giants (1919), Wallace was involved in a train crash and his injuries prevented him from finishing the film. Unwilling to stop the film, the studio sent the company doctor up to Oregon with a supply of morphine so that he would continue working and not feel the pain of his injury. After the picture was finished, he was needed to begin another so the studio kept supplying Wallace with morphine and he became hooked. Coupled with the alcohol, Wallace never had a chance and by 1922, he started entering a succession of hospitals and sanitariums as his health faded.

Making his last film for the studio, Thirty Days (1922) Wallace was barely able to stand, let alone act. He died at the sanitarium, in his wife Dorothy`s arms, on the 18th day of January 1923 at the age of only 31. Wallace was the third major Paramount personality to be involved in scandal in 1922.

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