However, there were few sea otters left by the late 1890's, which created hardships for villagers at Douglas. Men devoted less time to subsistence hunting and fishing in order to seek out otters for the fur trade companies. Women and the older men and boys at the village could not prepare enough food to last through the long winters. As a result, many families relied on credit at the company stores for food, clothing and other provisions. As the fur trade declined, villagers suffered hunger and starvation when store credit was restricted.

Douglas was covered by a thick layer of ash and debris churned out by the Katmai volcanic eruption in 1912. The residents of the village were fishing at Kaflia Bay at the time of the eruption, and were rescued there by a U. S. Revenue Cutter Service ship.