In the 1850s and 1860s, Centralia's Borst Home at the confluence of the Chehalis and Skookumchuck Rivers was the site of a toll ferry, and the halfway stopping point for stagecoaches operating between Kalama, Washington and Tacoma. In 1850, J. G. Cochran and his wife Anna were led there via the Oregon Trail by their adopted son, a free African-American named George Washington (Washington pioneer), as the family feared he would be forced into slavery if they stayed in Missouri after the passage of the Compromise of 1850. Cochran filed a donation land claim near the Borst Home in 1852, and was able to sell his claim to Washington for $6000 because unlike the neighboring Oregon Territory, there was no restriction against passing legal ownership of land to negroes in the newly formed Washington Territory.
Upon hearing of the imminent arrival of the Northern Pacific Railway (NP) in 1872, George Washington filed a plat for the town of Centerville, naming the streets after biblical references and offering lots for $10 each, with one lot free to buyers who built houses. Finding that another town in the south-central part of the state bore the same name, the town was officially incorporated as Centralia on February 3, 1886, so dubbed by a recent settler from Centralia, Illinois. The town's population boomed, then collapsed in the Panic of 1893, when the NP went bankrupt; entire city blocks were offered for as little as $50 with no takers. Washington made personal loans and forgave debt to keep the town afloat until the economy stabilized; the city then boomed again based on the coal, lumber and dairying industries. On his death in 1905, all businesses in the town closed, and 5000 mourners attended his funeral.
The boom lasted until November 11, 1919, when the infamous Centralia Massacre occurred. Spurred on by local lumber barons, American Legionnaires (many of whom had returned from WWI to find their jobs filled by pro-union members of the International Workers of the World), used that day's Armistice Day parade to attack the IWW hall. Marching with loaded weapons, the Legionnaires broke from the parade and stormed the hall in an effort to bust union organizing efforts by what was seen to be a Bolshevik-inspired labor movement. Though it remains a point of controversy as to who fired first, IWW workers led by Wesley Everest engaged and killed four Legionnaires; Everest was captured, jailed and then lynched, and other IWW members jailed. The event made international headlines, and coupled with similar actions in Everett, Washington and other lumber towns, stifled the American labor movement until the economic devastation of the 1930s Great Depression changed opinions about labor organizations.
The town's name was originally to indicate the midway point between Tacoma and Kalama (which were originally the NP's Washington termini), but proved to have longevity when it became the midpoint between Seattle and Portland, Oregon as well during the development of Washington's I-5 portion of the Interstate Highway System. As extractive industries faced decline, Centralia's development refocused on freeway oriented food, lodging, retail and tourism, as well as regional shipping and warehousing facilities, leading to 60% population growth over the past four decades.
According to the United States Census Bureau, the city has a total area of 7.56 square miles (19.58 km2), of which, 7.42 square miles (19.22 km2) is land and 0.14 square miles (0.36 km2) is water.
This region experiences warm and dry summers, with no average monthly temperatures above 71.6 °F. According to the Köppen Climate Classification system, Centralia has a warm-summer Mediterranean climate, abbreviated "Csb" on climate maps. Temperatures are usually quite mild, although Centralia is generally warmer in the summer and colder in the winter than locations further north along the Puget Sound.
Founded as a railroad town, Centralia's economy was originally dependent on such extractive industries as coal and lumber. The explosion of Mt. St. Helens on May 18, 1980 devastated the local lumber industry, as 12 million board feet of stockpiled lumber and 4 billion board feet of salable timber was damaged or destroyed. Unemployment surged to double digits, and the town lost most of its retail base.
The 1972 opening of I-5 exit 82 made Centralia the halfway stopping point between Seattle and Portland, Oregon, and heralded the beginning of freeway oriented development. In 1988, London Fog (company)opened the first factory outlet store in the Northwest at Exit 82, spawning the region's first factory outlet center and making the town a tourist shopping destination. This led in turn to the redevelopment of the vintage downtown marketplace as an antique, art and specialty store destination.
On November 28, 2006, it was announced that TransAlta Corp., the largest employer in Centralia and operator of the Centralia Coal Mine, would eliminate 600 high-paying coal mining jobs. Despite fears to the contrary, there has been little noticeable economic effect upon the City of Centralia as a result. Data indicates that Centralia experienced growth both in its light industrial areas as well as its core business district, historic downtown Centralia.
Additional development of regional distribution and transportation facilities, along with in-migration from retirees from more populated counties to the north, have helped diversify the economy, though unemployment remains stubbornly high and per-capita income well below the state average.