Near the confluence of the Newaukum and Chehalis Rivers is Chehalis (“shifting sands”), the seat of Lewis County. The business district, compact with modern structures and trim shops, has an air of prosperity and leisure. The city began as a settlement around a warehouse beside a railroad track in 1873, when the Northern Pacific built northward from Kalama to Tacoma, and ignored Claquato, then the county seat, three miles to the west. Some settlers in the vicinity decided that, if the railroad would not go to the county seat, the seat must go to the railroad. By 1874, a store was added to the warehouse, several houses were constructed, and the county seat was moved to the new settlement, leaving Claquato little more than a historic landmark. The new town was first named Saundersville, for S. S. Saunders, on whose donation land claim it was founded. In 1879 the name was changed to Chehalis.
Logging soon began in the near-by forests. Lumber workers of Scandinavian, Anglo-Saxon, and Scotch-Irish descent arrived, and remained to settle in the neighboring valleys. By the 1940s dairying, poultry raising, and fruit growing were carried on here. Besides lumbering, local industries include milk condensing, fruit and vegetable packing, brick and tile manufacturing, coal mining, portable house manufacturing, and fern shipping.