John Henry Kirby, lawyer, lumberman, and financier, formed the Kirby Lumber Company in 1901 in his native East Texas. With the discovery of oil at Spindletop in mind, Kirby sought to create a unique business arrangement. He would organize dual corporations, one oil and one timber, with the lumber company to buy and manufacture timber from the oil company. The Kirby Lumber Company would gain timber rights on its extensive East Texas properties, while the Houston Oil Company would hold mineral rights. Kirby also agreed to help the oil company gain title to approximately 800,000 acres of East Texas timber land.

The failure by Kirby and his eastern financiers to determine clear title to their various properties, as well as Kirby's overestimate of the worth of the timber, resulted in litigation. After the Maryland Trust Company, the primary backer of the scheme, brought suit, a Texas court placed both the Kirby Lumber Company and the Houston Oil Company into receivership between 1904 and 1908 allowing the two sides to determine their respective responsibilities.

Despite its initial troubles, the Kirby Lumber Company prospered, selling lumber throughout the United States, Europe, and Latin America. By the 1920s, it had become the largest yellow timber manufacturer in the Gulf Southwest. The company owned numerous lumber mills and rail connections.

John Henry Kirby died in 1940, seven years after declaring personal bankruptcy. The Kirby Lumber Company, however, continued operations, passing into the Santa Fe Railroad's control by the 1950s.