The first shipments of timber from the Puget Sound to San Francisco in 1851 stimulated interest in the business potential of building sawmills on Puget Sound. John R. Thorndike and W. P. Sayward sailed to Puget Sound in 1852 and found the environs of Port Ludlow promising. Thorndike filed a timber claim of , and they started building a mill there. The initial mill housed two sash saws capable of producing of lumber daily. The trees along the banks of the bay were logged first, and then oxen and horses were used to bring more distant logs to the mill. The mill was leased in 1858 to the Amos & Phinney Company, of which A. Phinney became the resident manager.