As America fulfilled its dreams of Manifest Destiny, colonizing western
United States and settling in booming cities, greater exploration for
resources was required.  San Francisco during the late 1800's, one of the
largest cities on the American Pacific coast, required greater amounts of
recourses; primarily coal, for its booming population and growth.  Coal
was abundant north in the Washington territory, where coal resources
stretched from Centralia to Issaquah.  Exploration for economical coal
deposits began.

The Black Diamond Coal Mining Company from San Francisco was a
booming company, supplying much of San Francisco's coal needs.  Their main
coal source was Mount Diablo, east of Oakland.  However, the deposit was
quickly taxed by 1870 and new sources needed to be found.  Coal was
imported on grain ships from England and Australia (in the ship ballast),
as well as British Columbia, where cheap Chinese labor kept prices
competitive.  Eyes turned towards Washington territory, where abundant
coal deposits were observed throughout the area.

In the late 1870's, a prospecting party, lead by Victor Tull from the
Black Diamond Coal Mining Company, started exploration along the Green
River.  Low-grade surface coal deposits were earlier found along this
river system in the 1873, but transportation along with steep valley
walls, thick brush and timber made low-grade operations non-economical.
The prospecting team in 1880 discovered a high-grade coal seam, later
named the McKay coal seam, near modern day Black Diamond.  The Black
Diamond Mining Company started to quietly purchase land in the area.
Quietly purchasing was necessary to keep the land cheap and to prevent a
"rush" of independent miners into the area.  This was complicated by
Washington territory law, which at the time limited the amount of land a
mining company could own as well as land purchasing from Northern Pacific
railroad.

Rumors began to spring up in the Daily Chronicle, a Seattle
newspaper, about a mysterious California company with limitless capital
preparing to mine coal along the Green river.  The Black Diamond Mining
Company was successful in purchasing the land and made plans to exploit
the coalfields.  The Oregon Improvement Co., a subsidiary of Northern
Pacific railroads, started making plans to extend the railroad system into
the area.  Henry Villard, of the Northern Pacific railroad also required
coal for their operations and the mutual interest at the time was
beneficial to both parties.  Oregon Improvement Company took over
operations in the area.  He planned to extend the Columbia and Puget Sound
Railroad from Renton up the Cedar River to Black Diamond and beyond to
Franklin.  Capital needed to be raised and Henry Villard solicited many
Seattle businessmen for capital, but due to an economic downturn in 1883,
he was only able to raid $150,000 in subsidies.

Operations began in Black Diamond in January of 1882, with the start of
the Black Diamond mine No. 14.  The railroad was not complete until
December 12th of 1884, but commercial production from Black Diamond began
in March of 1885.  The railroad allowed for heavy machinery to be brought
in from Seattle, used in commercial mining, and coal to be transported to
the King Street Coal wharf.  From there, it was loaded onto a ship and
sailed for San Francisco.  By 1882, three coal hauling ships were in
operation, making five runs a month between the two cities.  In April of
1885, with the availability of heavy machinery, expansion of mining
operations sprung up in Franklin, Ravensdale, Cedar Mountain and Lawson.