Valparaiso: History

A lieutenant from Diego de Almagro's expedition whose troops met a supply ship from Peru in what is now the Bahia de Valparaiso in 1536, as the founder of the city. Despite Pedro de Valdivia's designation of the bay as the port of Santiago and the building of some churches, more than 2 and half centuries passed before the Spanish crown established a cabildo in 1791. Not until 1802 did Valparaiso legally become a city.

Spanish mercantilism retarded Valaparaiso's growth in colonial times, but after independence foreign merchants quickly established their presence. One visitor in 1822 remarks that Englishmen and North Americans so dominated the city that butfor the mean and dirty appearance of the place, a stranger might almost fancy himself arrived at a British settlement. It is commerce was disorderly but vigorous.

Only a few months later, another visitor had similar impressions, noting that although even the governor's house and the custom-house are of poor appearance all the symptoms of greate increase of trade are visible in the many new erections for ware-houses.

Valparaiso's population at independence was barely 5,000, but the demand for Chilean wheate brought on by the California Gold Rush prompted such a boom that, shortly after mid-century, the city's population was about 55,000. Completion of the railroad from Santiago was a further boost and, by 1880, the population exceeded 100,000. As the first major port-of-call for ships around Cape Horn, the city had become a major commercial center for the entire Pacific coast and the hub of Chile's nascent banking industry.

The opening of the Panama Canal was a notable blow to Valparaiso's economy, as European shipping avoid the much longer and more arduous Cape Horn route. Furthermore, Chilean exports of mineral nitrates declined as Europeans found synthetic substitutes, indirectly affecting Valparaiso by further reducing maritime commerce in the region. The US Great Depression was a calamity, as demand for Chile's other mineral exports declined. Not untill after World War II was there significant recovery, as the country began to industrialize.

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