The Damascus Lumber Company was originally formed by two men from Pennsylvania. These men were H. E. Clark, and J. W. McCullough, who chartered the company in Damascus, Virginia, (Hence the name) in about 1906. The company operated their mill in Laureldale, Virginia, (East of Damascus) and were contracted by the nearby T. W. Thayer Lumber Company to cut all their harvested timber. The company owned two small geared steam locomotives to switch the mill and work the logging spurs in Eastern Tennessee and Western North Carolina which the company owned. Both lines were narrow gauge which allowed easy transferring of logs and finished cut lumber.

The lumber company also had a small narrow gauge line, which connected to the T. W. Thayers *Laurel Railway* line at Laurel Bloomery, Tennessee, which was constructed to harvest rich white pine plentiful in the area. The Damascus Lumber Company had many logging spurs in Ashe County, North Carolina (Especially around Pond Mountain) and Johnson County, Tennessee (Around a place called Bethel), but eventually, like all logging railroads of the era, the timber dried up and so did all the logging spurs owned by the company.

The last spur was finally removed in 1919. Tragedy struck again when the sawmill in Laureldale was destroyed by a fire in 1921 after producing 18 to 21 million feet of lumber annually. Before anything else could go wrong, the owners sold the company to a competitor and on March 16, 1923, the company was bought by the nearby Hassinger Lumber Company of Konnarock, Virginia, and the mill at Laureldale was rebuilt for Hassinger lumber use. Hassinger rebuilt the mill into a flooring plant and operated it until 1930 when it finally closed down for good.