From 1850 to 1875, some 30,000 German immigrants settled in the region around Valdivia, Osorno and Llanquihue in Southern Chile as part of a state-led colonization scheme.
They brought skills and assets as artisans, farmers and merchants to Chile, contributing to the nascent country's economic and industrial development.
The second scheme considered the colonization of both the shores of Llanquihue Lake and the mouth of the Maullín River in what is now the Los Lagos Region of southern Chile.
[2] In 1844, Philippi formed a partnership with Ferdinand Flindt, a German merchant based in Valparaíso, who also represented Prussia there as consul.
With financial backing from Flindt, Philippi purchased land in Valdivia and along the southern bank of the Bueno River to be developed by future immigrants.
[4][5] The Chilean legislature entered colonist recruitment with passage of the Law of Colonization and Vacant Lots (Ley de Colonización y Tierras Baldías), which was signed by president Manuel Montt in 1845.
[5] That same year, Salvador Sanfuentes was appointed intendant of the Province of Valdivia and tasked with surveying its colonization potential.
[2] The outbreak of the Revolutions of 1848 in the German states persuaded the previously hesitant Philippi to travel to Europe to recruit settlers.
Troubled by Catholic bishops in Germany who opposed the departure of their parishioners, Philippi asked for and was granted permission to recruit non-Catholic immigrants.
[2] Philippi also succeeded in having the Chilean government put fixed prices on fiscal colonization land to stimulate immigration of economically independent individuals and avoid speculation.
[2] The immigrants recruited by Philippi arrived in 1850 at Valdivia, where Vicente Pérez Rosales was declared colonization agent by the Chilean government.
By 1850, this last group was too small to establish a functional German settlement at the shores of Llanquihue Lake as Philippi had envisioned.
Never will have the country that adopts us as its children, reason to repent of such illustrated, human and generous proceeding,... Pérez Rosales succeeded Philippi as government agent in Europe in 1850; he returned to Chile in 1852 with many German families to settle the shores of Llanquihue Lake.
[15] Since colonial times the city had been isolated from Central Chile by hostile Mapuche-controlled territory, and it depended heavily upon seaborne trade with the port of Callao in Peru.
Most German settlers who reached Valdivia brought current assets, including machinery or other valuable goods.
[15] The nature of the German immigrants to Valdivia contributed to the city's urban and cosmopolitan outlook, especially when compared to Osorno.
As transportation developed, the settlers' economy shifted into one linked to national and international markets and based on the exploitation of natural resources, chiefly wood from the Valdivian temperate rainforests.
[8] Germans and German-Chileans developed trade across the Andes, controlling mountain passes and establishing the settlement from which Bariloche in Argentina grew.
[18][16] With land ownership heavily concentrated among a few families, many indigenous Huilliche of Osorno became peasants of large estates (latifundia) owned by Germans.
A pamphlet published in Germany by Franz Kindermann to attract immigrants states that while neither Chileans (meaning those of Spanish descent) nor the Mapuche liked to work, the latter were honest.
Another reason for the soured relations was that German immigrants and their descendants became involved in land ownership conflicts with Huilliche, Mapuche and other Chileans.
Chilean minister Luis Aldunate considered that Germans integrated poorly and that the country should avoid "exclusive and dominant races to monopolize the colonization".
[19] The functions of the Comisario de Naciones were overtaken by ordinary judges in the mid-19th century who were not aware of indigenous land possessions.
[24] In the 20th century two members of the Grob family linked to dairy company COLUN have been accused of usurpation of land and being behind the violent eviction of Mapuche-Huilliche around Ranco Lake.
[26] In the Ranco area a conflict known as "La guerra de los moscos" around 1970 marked the end of loss of land for Mapuche-Huilliche families.
The German spoken around Llanquihue Lake gave origin to a dialect called Lagunen-deutsch, a local variant of Alemañol.