The company mill town of Stern [Sterne] in Nacogdoches County had its beginning in early 1906. The American Lumberman announced in 1906 that the newly formed corporation of Sterne Lumber Company had applied for a charter build a mill of 20,000 board feet per day. The officers were A. Y. Donegan, E. M. Dotson, and R. W. Persons. The sawmill was listed in the 1907 Reference Book of the Lumbermen's Credit Association as manufacturing lumber at Nacogdoches. E. A. Blount, a Nacogdoches timber factor and businessman, gained control early of the Stern Lumber Company. In September 1906, E. A. Blount Lumber Company sold the Sterne Lumber Company at Sterne to J. P. Carter of Carter Lumber Company. Blount probably also sold his sawmilling projects in Blount Lumber Company and a hardwood mill, the former A. J. Oliver sawmill at Clawson, Angelina County, to Carter. Property and equipment conveyed in the sale of Sterne Lumber Company included a 10-inch by 54-inch Houston, Stanwood and Gamble boiler, a “R” Rockwood sawmill, an edger, 54-inch and 56-inch circular saws, a mandrel, a cutoff saw, buildings, sheds, trams,, all located on the Ignacio Sanchez league, just east of the Houston East & West Texas.
Carter renamed both the community (Mayo) and the company. Mayo, sometimes known as Mayotown, is identified in Nacogdoches County records as the former town of Sterne. The facility was upgraded to cut 80,000 board feet per day. Carter's company owned 1477 acres in Nacogdoches County. The plant was located about seven and a half miles northeast of Nacogdoches. Carter carried a $50,000 fire insurance policy on it. Physical facilities included the sawmill, planing mill, commissary, cottages and one- and two-story houses for employees, and a tram with engines and cars. Carter had a $300,000 mortgage on timber lands in 1914. In 1917, the company was in serious financial trouble. June Harris, as receiver, was forced into selling all of the property and lands for $62,500.