Why Did K.C. Irving Keep Cutting Timber He Could Not Sell?

Shane Parrish says K.C. Irving kept cutting timber through the Depression and stopped selling it, while competitors laid people off and waited.

In June 1933 his father, J.D., died. J.D. had never made peace with Irving leaving the family business, so Irving came back and bought it, including the old sawmill and its 7,000 acres of timberland. Spruce budworms were still eating the forest, and lumber prices were so low that every sale was a loss. The obvious move was to stop cutting and wait. Irving kept the crews cutting and stopped selling. For six straight years they cut timber, and in only three of those years did he sell any of the wood. The rest piled up.

Piles of timber cost money, and the bank lost its nerve. It called a loan said to be close to $2 million, due immediately, an order from the head office in Toronto rather than from his local banker. Irving believed for the rest of his life that competitors had pushed for the call, hoping to catch him with his money tied up in unsold lumber. He had never missed a payment. Another lender took the bet, the called loan was paid in full, and he kept cutting. In 1939 prices rose. He was sitting on years of inventory cut when costs were low, and the lumber that had nearly buried him was worth a fortune.