Kadiak Fisheries began construction of a cannery in Dry Spruce Bay near Kupreanof Strait in 1936. Most of the construction was done in 1937. The vice-president of the company at the time was F. Howard Bailey and the cannery was named in honor of him. The cannery was completed in the spring of 1938. After the Port Bailey plant was completed the company closed their plants in Kodiak, Shearwater Bay and Carmel and relinquished a lease with Shelikof Packing Company at Zachar Bay.
In 1948 a fire destroyed most of the facility. The company decided to rebuild on the same site and reopened the cannery in 1949. The rebuilt Port Bailey cannery was the first major salmon cannery to be built following World War II. Columbia-Wards Fisheries purchased the Port Bailey plant in 1968
For more historical information about living and working at Port Bailey check out "Dropout Sourdough" by Martin Wandersee.