When Blood took office in 1933, more than a third of the work force was unemployed and the percentage of Utahns on relief was among the highest in the nation, a situation exacerbated in 1934 by the worst drought in the state's history. The governor pushed for a sales tax - reluctantly set by the legislature at two percent - to qualify the state for federal funds, and got lending institutions to agree to a ninety-day moratorium on foreclosures in order to give families a chance to refinance their homes and farms. He lobbied intensively in Washington, and Utah ranked near the top in it portion of per capita federal spending during the Depression. The WPA, CCC, and other federal programs created jobs and helped build highways, public buildings, recreational facilities, and irrigation/reclamation works; the programs also sponsored arts and historical records projects.

A fiscal conservative, Blood vetoed many bills but approved the creation of a Department of Public Welfare and a system of state-owned liquor stores. Endorsed by Franklin D. Roosevelt, he won renomination in 1936 despite a strong challenge from liberal Democrats led by Herbert B. Maw. He defeated Republican Ray E. Dillman, former state senate president, and Ogden Mayor Harman W. Peery, an Independent-Progressive.