Patagonian sheep farming boom

All the best sheep-herding areas along the Strait had been leased or reserved by 1884.[3] At this point the governor of the Argentine territory of Santa Cruz Carlos María Moyano travelled to the Falkland Islands where he promised cheap rental of land for any farmer that moved in to the scarcely populated territory.[8] A group of five settlers who arrived this way, Henry Jamieson, John Hamilton, William Saunders, Mac Clain and George Mac George set up a plan to quickly set up large sheep farms. These men went in 1888 to Buenos Aires and then to Río Negro where they purchased thousands of sheep, horses and supplies.[8] All sheep, herders, horses and supplies gathered at the Argentine outpost of Fortín Conesa from where they departed south on September 8.[8] The herders followed a route along the coast similar to modern National Route 3 for hundreds of kilometers until reaching their land grants in the territory of Santa Cruz. As movement of livestock of this magnitude was unheard of the region the feat was later baptised as El Gran Arreo or The Great Herding by writer José Salvador Borerro Rivera.[8]

In Chile sheep farming expanded from the Strait of Magellan to the area around Última Esperanza Sound where in 1893 that the first estancia was established.[9] Attempts to establish a cattle farming business by entrepeneur Daniel Cruz Ramírez around 1899 in Muñoz Gamero Peninsula failed given the humid climate and swampy terrain.[10]

When most of the land leases around the Strait of Magellan expired around 1902 the Chilean government decided to auction the lands. This was possibly due to pressure from commercial interests in Valparaíso and Santiago that had come to realize how profitable sheep raising in Magallanes was. British and other entrepeneurs that had leased the lands sought to be able to purchase the land directly from the state but were unsuccessful in their attempts.[6] The first actions begun on March 20, 1903.[11]

Sheep farms around Última Esperanza Sound was initially unaffected by the auctions but on March 15, 1905, these lands too were auctioned.[9] Sociedad Explotadora de Tierra del Fuego became the main landowner in the area establishing its local estancia headquarters in Cerro Castillo.[9]

In a few days' time half a dozen companies had been formed with big capitals, and in order to save their homes the colonists formed themselves into one company, the United Estancias of Ultima Esperanza. At the auction there were wild scenes, enormous bids were made, and lots were sold at prices ten times their true value. The result was that most of the purchasers could not pay at the proper time

— Carl Skottsberg about the auctions on March 15, 1905[9]

When the auctions finished in September 1906 three companies owned by a total of 18 individuals owned most of the land suitable for sheep farming around the Strait.[6] Many of the early British sheep farming pioneers were not able to continue in busness as owners, but some did.[6] The concentration of land in a few properties gave land ternure in Magallanes a latifundium structure.[11] This increased concentration of land ownership faced criticism from authors like Lautaro Navarro who in 1908 wrote "...what was appropiate for the Territory was subivision [of land into smaller properties] as means to increase the population and give land access to small capitalists who whished to establish estancias in their own lands".[11][upper-alpha 1] With particular reference to the Última Esperanza area Swedish explorer Carl Skottsberg was also critical of the auctions and the resulting changens in land property, in his book The Wilds of Patagonia (1911) he wrote: "I can hardly believe that the revolution was favourable to Chile's interests, and I daresay that is a rather ugly page in the history of a so-called democratic people. Men who knew Patagonia before and now say that the "star of Ultima Esperanza sank when the all-mighty company became its master.".[9]