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The 1938 Oregon gubernatorial election took place on November 8, 1938. In the election for governor of Oregon, Republican nominee Charles A. Sprague defeated Democratic nominee Henry L. Hess. Incumbent governor Charles Martin lost in the Democratic primary to Hess, an attorney and former state senator from La Grande. Hess was a strong supporter of President Franklin Delano Roosevelt's New Deal while Martin was a frequent critic of the program.
Incumbent Democratic governor Charles Martin had been elected in the middle of the Great Depression in the 1934 governor's race. A conservative Democrat, Martin appealed to many business-minded Republicans, and his administration focused on strengthening state finances, even opposing restoring state workers to full pay as the Depression eased. Martin vigorously opposed many aspects of President Roosevelt's New Deal, in particular parts dealing with unions and labor, such as the formation of the National Labor Relations Board.
When Martin announced his intention to run for the Democratic nomination for another term, labor unions and the Roosevelt administration sought an alternative, eventually throwing their weight behind Henry L. Hess, a little-known attorney and former state senator from Union County.Harold L. Ickes, Roosevelt's Secretary of the Interior and a key implementer of New Deal policies, indicated his support for Hess, though Roosevelt himself stayed officially neutral.