Even when relations between miners and employers were peaceful, discontent and public concern mounted over the deteriorating conditions in which Company housing obliged the miners to live.
By February 1929, coal miners across NSW were once again on strike and strike-breakers were imported to work the colliery. The worldwide economic depression followed.
Jobs in coal mining plummeted and then as the economy recovered, increasing mechanization of the coal industry affected Catherine Hill Bay. The period up and into World War 2 was a period of industrial unrest.

House at the Sawmill Photo R Miller
In 1941 100 Wallarah miners staged a stay-in for a record 101 hours over a penalty clause in their award. The publicity that this caused brought public attention to the squalid living conditions in the company town. Many comments reflected that the town was completely owned by shareholders who lived in England.