Chile Chico was first colonized in 1909, when a band of Argentine pioneers crossed the River Jeinimeni, which marked the newly-established border with Chile, and made primitive homesteads on the southern lakeshore. The Santiago government's attention was fully occupied by affairs in the heartland, and a colony which was only accessible across a stormy lake expected to be left in peace. So it came as an unpleasant surprise when, in 1918, two gringos arrived flourishing official papers.
One was a German by the name of Karl von Flack. The other, an Englishman, is unnamed in the historical sources, but may have been Lucas Bridges from Chacabuco. Their papers, which bore the seal of the Ministry of Colonization in Santiago, included the deeds to the entire southern lakeshore. They were certainly genuine; von Flack had a receipt to show that he had paid the Ministry 28 700 Chilean pesos—more than the settlers would earn in a lifetime. Tactlessly, von Flack offered the 200 settlers a few pesos for their animals before he threw them out. Their reply came in the form of pointed rifles. Von Flack retreated to the safety of Argentina, holed up in a farm and telegraphed the Ministry in Santiago. A few weeks later the settlers looked out of their windows to see him approaching again, this time with a sergeant, five constables and a government order that they get off the land forthwith.
The clash that followed came to be known as the War of Chile Chico. The settlers were fighting for their livelihoods—and in some cases, towards the end, their lives. Von Flack, on the other hand, had paid over his money in good faith, and regarded the land as legitimately his. As the conflict gathered momentum, there arose among the settlers a leader by the name of José Silva, who called the able-bodied men to arms. It was inevitable that the conflict would escalate. When the police set fire to a couple of houses, the settlers retaliated. Under cover of darkness, they hunted down the constables and their sergeant, and by morning three of the six lay dead.
Von Flack and the survivors retreated once more to Argentina, with the settlers in hot pursuit. The Argentine authorities, always touchy about territorial matters, responded by sending their own force up from the coast. Meanwhile the Chilean sergeant had issued a desperate call for reinforcements from Santiago. Within three months two small armies stood facing each other across the border, with von Flack maintaining a nervous line of communication between the soldiers and the settlers barricaded in their homes.
More were to die, and a great deal of rancour exchanged between the governments and settlers, before the issue of who owned Chile Chico was finally resolved. Against all expectation, the settlers won. In 1921, worn down by their aggressive forays and receiving less and less help from the Santiago government, von Flack renounced his title to the land. Four years later, the Ministry refunded his money. The guerrillas of Chile Chico went back to farming their land, and in 1931, after more than a decade of lobbying, the authorities gave them the deeds to which they had been legally entitled all along.