The modern settlement of Bariloche developed from a shop established by Carlos Wiederhold.
The German immigrant had first settled in the area of Lake Llanquihue in Chile. Wiederhold
crossed the Andes and established a little shop called La Alemana (The German). A
small settlement developed around the shop, and its former site is the city center. By 1895
the settlement was primarily made up of German-speaking immigrants: Austrians,
Germans, and Slovenians, as well as Italians from the city of Belluno, and Chileans. A local
legend says that the name came from a letter erroneously addressed to Wiederhold as
San Carlos instead of Don Carlos. Most of the commerce in Bariloche related to goods
imported and exported at the seaport of Puerto Montt in Chile. In 1896 Perito Moreno wrote
that it took three days to reach Puerto Montt from Bariloche, but traveling to Viedma on the
Atlantic coast of Argentina took "one month or more".
In the 1930s the centre of the city was redesigned to have the appearance of a
traditional European central alpine town (it was called "Little Switzerland.") Many buildings
were made of wood and stone. In 1909 there were 1,250 inhabitants; a telegraph, post
office, and a road connected the city with Neuquén. Commerce continued to depend on
Chile until the arrival of the railroad in 1934, which connected the city with Argentine markets.