The Pacific Coast Company (PCC) purchased the property of the Oregon Improvement Company (OIC) on December 1, 1897. Mr. C.J. Smith, father of the donor, was the Receiver for the Oregon Improvement Company. He continued as general manager of the new Pacific Coast Company (See letter 5 July 1898), which merchandised oil in the coast-wide trade, conducted real estate operations in Seattle and coal mining promotions in British Columbia, and had as subsidiaries the Black Diamond Coal Mine (Wash.), the Cedar Mountain Coal Mine (Wash.), the Columbia and Puget Sound Railroad, Pacific Coast Coal and Oil Company, Pacific Coast Railway Company (San Luis Obispo), and the Pacific Coast Steamship Company.

In 1896, the Oregon Improvement Company went into receivership for the second time in its sixteen year history. The following year, the newly-formed Pacific Coast Company absorbed the insolvent OIC, taking control of all its operations. The PCC inherited the Pacific Coast Railway in California, three Washington railroads, the Pacific Coast Steamship Company, and an extensive mining operation in western Washington, which was the company’s backbone.

The new Pacific Coast management made several moves to stop the financial hemorrhaging of its Washington railroad subsidiaries. The first step was to make the long overdue transition of the Columbia & Puget Sound Railroad to standard gauge tracks. The company shortly later sold Seattle & Northern Railroad and the Port Townsend Southern Railroad, both perennial money losers. In 1916, the Columbia & Puget Sound changed its name to the Pacific Coast Railroad, not to be confused with the PCC’s California subsidiary, the Pacific Coast Railway. Great Northern Railroad acquired control of Pacific Coast Railroad in 1951.

The 1897 advent of the PCC brought new vitality to the Pacific Coast Steamship Company. Business increased substantially, especially to Alaska because of the discovery of gold in the Klondike and the establishment of salmon canneries. By 1916, however, shortly after a record year spurred by the 1915 Panama-Pacific Exposition at San Francisco, the company sold its passenger ships to the Pacific-Alaska Navigation Co. The trademarked name of the Pacific Coast Steamship Company did not fall immediately into disuse, since the PCC used its house flag on two freighters in the Alaska gypsum trade until 1938, when it finally liquidated the company.

From the very beginning, the OIC found its mining operations vexing, and the PCC would fall heir to the same difficulties. The most fundamental difficulty was the geologic nature of the western Washington coal beds. Because virtually all the coal layers are interwoven with partings, miners have to use steep-slope techniques and mechanically clean the coals outside the mines. The shape of the coal fields also precluded much machine mining, necessitating the use of traditional hand-mining methods. In 1915, only 12.8% of Washington coal was machine mined, compared to the national average of 55%. This low level of mechanization resulted in low productivity per man-hour. The special requirements resulted in up to 80% higher production costs in Washington than in other parts of the western United States. Because of this, when economic times were poor, Washington coal was often the first cut out of the market and the last back in after economic recovery.

The PCC also acquired with the mines a relationship with its mine workers that was tense at best, tumultuous at worst. Fortunately for the PCC, the Pacific Coast Coal Company, as the subsidiary was known after 1908, did avoid much of the acrimony and the conflicts which had characterized labor relations under the OIC. The new management, no doubt unwilling to jeopardize its new-found good times with labor discord, even agreed in 1908 to a contract providing an eight-hour day and a 10¢ per day raise. The relative calm lasted until 1919. The miners, and their union, became increasingly dissatisfied that prices continued to rise, but wages remained frozen under existing contracts. The company, now faced with less economically propitious times, proved intransigent to all demands. With the two sides deadlocked, a bitter series of strikes and lockouts began. In 1921, two state commissions investigated the impasse, and the last one suggested that miners accept a 25% to 28% wage reduction, exasperating the situation. The coal company proved the stronger of the two combatants, however, and had broken the union by 1923. Shortly after the management victory, an article in the company-produced newsletter, the Pacific Coast Bulletin, announced that “the principle producers in all except the East-of-the-mountains fields thereupon declared for the open shop, recruited new forces from the whole of the Northwest, and have built up a fine body of employees, who are well treated, perfectly satisfied and recognize that their interest and that of their employer are mutual. Many operators of the state feel that this is the beginning of an era that will develop into one of real prosperity for the state’s bituminous coal mining industry.”

Despite the hopeful assessment of the propaganda, the Washington coal industry suffered from problems too deep to be solved merely through the control of labor costs. Real prosperity would never return. By 1918, Washington coal began to experience intense competition from several sides. In 1927 the Bulletin noted with extreme understatement that “sales activities are constantly confronted with the competition of cheap fuel oil, hogged fuel, and electrical energy, all of which combine to make the battle for markets of keenest interest.” Despite quixotic expectations that fuel oil would become less plentiful and more expensive the Bulletin even published a hopeful story in 1926 about a Swedish scientist who anticipated the depletion of the world’s oil reserves by 1940. Washington coal’s battle with oil became increasingly lopsided. Further damaging the position of the Pacific Coast Coal Company was the completion of railroad access to western Washington, allowing cheaper and often higher-quality Rocky Mountain coal to compete directly with local coal, and the development of technological advantages which allowed industry still using coal to do so more efficiently. The company tried to diversify by opening the first coal briquette plant in the Pacific Northwest, but this did nothing to reverse the established trends. By 1929, the Pacific Coast Coal Company closed all its big mines with the exception of the New Black Diamond mine, which continued production until 1942.