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In 1878 the first Salmon cannery was built here and started the Alaska Salmon Industry. North Pacific Packing and Trading Company built the cannery and the operation was run by the same company for 51 years without missing a season. A second cannery was started in 1920 by R.J. Peratrovich and a third in 1924 by Charles W. Demmert. Several companies have operated both over the years, but both failed and have fallen into ruins. Today a community owned cannery, a predominant feature on the Klawock waterfront, is operated by Southeast Seafoods.
In 1971 Alaska Timber Corporation started construction on a sawmill across the river on the 7 mile road that runs between Klawock and Craig. It shipped its first lumber in 1973.
The town is built on a hillside that faces the water and Klawock Island. The first airstrip was completed in 1973 about 2 miles from town.
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