The expansion of the Chilean state towards the Araucania region from the mid-nineteenth century had a major impact on the mapuche economy. The cattle bonanza of the pre-occupation period gave way to the economic malaise which characterized the post-occupation phase. Centring on the activity of silversmithing as a means of reflecting on these two periods, our study seeks to analyze the context and mechanisms which brought about the loss of silversmithing from mapuche hands in the late-nineteenth and early twentieth centuries. Sources used include notary documents, military reports, census information, newspapers, commercial guides and travel journals.