With the open support of President Roosevelt, Olson ran for governor of California in the 1938 general elections against conservative Republican and anti-labor incumbent Governor Frank Merriam. Merriam, known for suppressing the 1934 Longshore Strike and his conservative fiscal policies, was a highly unpopular candidate among progressives and unionists, with even conservative Republicans angered by his 1935 tax reforms. Merriam lost soundly to Olson. He was the first Democrat to win the governorship since James Budd's election in 1895, breaking the 40-year Republican dynasty over the governorship.