In 1886, striking miners cause coal shipments from Seattle to fall to less than a tenth of coal shipped the year before. Job actions are led by the Knights of Labor and mine owners respond by firing and blacklisting leaders and by importing armed guards.
Most of the coal from Puget Sound mines went to San Francisco by ship, but faced stiff competition there. Higher-quality coal from England and Australia was brought to California as ballast in grain ships. Coal from British Columbia was mined by lower-paid Chinese labor and further forced down prices. Puget Sound mine owners made money if there was a poor grain harvest or if there were strikes in Australia or England.
In May 1885, a one-week strike won Black Diamond miners a pay increase. In the fall of 1885, anti-Chinese riots resulted in the expulsion of Chinese laborers. With the shortage of replacement labor, the miners at Franklin struck for wages in December. The owner, Oregon Improvement Co., settled within a few weeks for a 17 percent wage hike.
Miners did not negotiate with management. Workers held mass meetings where issues were discussed and conflicts resolved, sometimes with fists. When a course of action was decided upon, the miners presented their demands to management. If owners hesitated, the miners put down their tools and walked off the job. If wages were to be cut, owners issued notices and if miners objected, the mines were closed.
In February 1886, the miners at Newcastle struck. Sixty miners walked 30 miles to Franklin and prevailed upon the men there to walk out in sympathy. The miners wanted higher wages, an end to the monopolies of the company store and the company saloon, and the right to board in private residences. Jobless miners found work on farms or in mines outside of Washington Territory.
The strike crumbled after three months, but by that time, the price of coal had gone into its seasonal slump.
For the next several years, the Knights of Labor and mine owners, led by the Oregon Improvement Co., struggled over wages and working conditions. Prices were generally high in winter months and miners struck then, confident that they could get higher wages. During the summer, the prices dropped and wages were cut. Strikes led to pay hikes, but were followed by cuts in a few months. In 1888, the miners split and formed the Miners' and Laborers' Protective League as an alternative to the Knights.
In 1885, Seattle shipped 231,816 tons of coal to San Francisco. In 1886, shipments totaled 22,453 tons.
