silver came to undervalue gold instead. Following independence in 1820 Valdivia entered a period of economic decline. This was because Valdivia was since colonial times isolated from Central Chile by hostile Mapuche territory and depended heavily upon seaborne trade with the port of Callao in Peru. With independence this intra-colonial traded ended but was not substituted by new routes. German immigrants that arrived from 1850 to 1875 transformed the economy of Valdivia and the whole Southern Chile. Among the achievements of the Germans immigrants was the deepening of division of labour, the introduction of wage labour in agriculture and the establishment of Chile's first beer brewery in Valdivia in 1851 by Carl Anwandter. Until the mid-19th century more than 80% of Chilean population remained rural working in agriculture or mining and was to a large degree self-sufficient to produce articles of consume. Saltpetre Republic (1873–1914) Starting in 1873, Chile's economy deteriorated. Chilean wheat exports were outcompeted by production in Canada, Russia, and Argentina. Chilean copper was largely replaced in international markets by copper from the United States and Río Tinto in Spain. Chile's silver mining income also dropped. In the mid-1870s, Peru nationalized its nitrate industry, affecting both British and Chilean interests. Contemporaries considered the crisis the worst ever of independent Chile. Chilean newspaper El Ferrocarril predicted 1879 to be "a year of mass business liquidation". In 1878, then-President Aníbal Pinto expressed his concern through the following statement: It was during this context of economic crisis that Chile became involved the costly War of the Pacific (1879–1883) seizing control of mineral-rich provinces of Peru and Bolivia. The notion that Chile entered the war to obtain economical gains has been a topic of debate among historians. The crisis in has also been considered by Jorge Pinto Rodríguez a force behind the new pulse of conquest of indigenous lands that took place in Araucanía in the 1870s. When Chile found herself in command of the then still Peruvian province of Tarapacá during the War of the Pacific and being subjected to pressure from Peru's creditors, who threatened Chile's credit in Europe if their claims were not met, the Chilean government essentially had two options: to nationalize the industry for Chile (that is to pay the Peruvian debt certificates), or to recognize the holders of the Peruvian debt certificates (which John Thomas North hurried to purchase at knock-down prices) as the owner of