As the area prepared for the turn of the twentieth century, fish stocks were unpredictable yet again. In the 1890's, Newfoundland attempted to increase stocks by returning cod and lobster eggs to the ocean. By 1921, four lobster factories had closed, and between 1925 and 1927 the lobster fishery was completely shut down to allow the stock to recover.

Herring had a brief boom in the early 1900's, but declined again after 1915 and never recovered. Some families turned to trapping for fur as an alternative to the unpredictable fishery. Oil and gas were found at St. Paul's inlet, but not enough to warrant large scale production. The Newfoundland government began to emphasize the wealth of the forests in the area in an attempt to diversify the economy. This was the most viable alternative to fishing in the area.

Lomond played a vital role in the development of the forestry industry in the Gros Morne National Park region. The first commercial logging mill to be built in the area was at Payne's Cove (Stanleyville) in 1895. It was steam-powered, and owned by brothers from Nova Scotia, John and Scobie McKie. By 1910 this mill employed 60 men. In 1916, the mill was bought by the St. Lawrence Timber, Pulp, and Steam Ship Company, and was relocated to Murphy's Cove (Lomond), where there would be more room for expansion.

Murphy's Cove was renamed Lomond by the Scottish mill manager at the time, George Simpson. At the time, the mill was the largest in Newfoundland, and consisted of a townsite with full amenities, including houses, bunkhouses, a meal hall, a store, a school and vegetable gardens. In Lomond's heyday, as many as 500 workers were employed there. One of the major projects during the early years of operation was the building of the "Million Log Raft". At the time, there was a shortage of lumber in Britain and few available ships because of the war, so it was proposed that a huge raft of tree trunks held together with steel bars be sent across the Atlantic. The Lomond "Million Log Raft" was one of several built in eastern Canada. It took almost two years to build and when completed, was 76 metres long, nearly 8 metres deep and 14 metres across. Unfortunately, after being launched in August of 1918, it fared poorly on the open ocean and broke up off the Newfoundland coast.

Overestimation of the size and amount of lumber available, and unforeseen expenses resulted in the closing of the mill at Lomond in the early 1920's. Lomond was still involved in logging. Raw pulp logs were sent by barges and log booms to the Corner Brook pulp mill and pit props (support beams for mine shafts) were shipped to other markets up until 1942. That year, the operation was bought by Bowater Ltd., and Lomond was used as a source of pulp logs for the Corner Brook mill. Most logs were moved by truck by then.

In the 20s and 30s, Lomond was a model town. The houses in town were all painted alike, and there were flower and vegetable gardens at St. Tecla. Various dignitaries, photographers, geologists, and sportsmen all visited the area. Lomond residents and visitors enjoyed social and sport activities including skating, cross country skiiing and salmon fishing.

More sawmills were built around Bonne Bay between the two World Wars. These were mostly family-run operations, and most of the lumber was used locally. White pine were the first trees to be cut; and as a result of overcutting, they were almost eliminated from the park area. Later, white spruce, black spruce and balsam fir were cut. Logging allowed many families to get out from under the merchant's thumb, introducing them to buying goods with cash. For the first 40 years of the twentieth century, lumbering remained a viable alternative to fishing, or as a winter cash supplement for many people.

Before 1950, communities in the area were dependent on coastal steamers and schooners to deliver mail and supplies in the summer. In the winter, mail was brought by dog team along a small coastal road. Though there were plans to link the Trans-Newfoundland railway to Bonne Bay, this never happened. Around the turn of the century, the railway from St. John's was connected to Deer Lake, disrupting caribou migrations. With the increased number of sport hunters on the west coast, caribou populations dropped sharply. A total ban on caribou hunting allowed these populations to recover.

Although the west coast experienced quite prosperous times in the first half of the century, it was still considered the "Forgotten Coast" by many Newfoundlanders at the time. The first road between Deer Lake and Lomond was finished in 1935, and in 1942 it was extended to Woody Point. From Woody Point, the only way to travel north was by ferry in summer, or across the ice in winter, and then onward up the Great Northern Peninsula by means of the mail road.

Things like basic medical care were hard to come by on the west coast. In 1939, the building of a cottage hospital in Norris Point helped to lower the high tuberculosis rates in the area. In 1944, the Compulsory Education law was passed, forcing all children between the ages of seven and twelve to attend school. This threatened the traditional way of life, since sons usually started fishing with their fathers between the ages of nine and twelve. Fishing was still the major industry in the area, so this worried some families. But even more change was coming, in the way of Confederation with Canada.