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See also: Hindu—German Conspiracy. The engagement probably took place as a result of misunderstandings. Neither admiral expected to meet the other in full force.
Once the two met, Cradock understood his orders were to fight to the end, despite the odds being heavily against him. Although Spee had an easy victory, destroying two enemy armoured cruisers for just three men injured, the engagement also cost him almost half his supply of ammunition, which was irreplaceable.
Shock at the British losses led the Admiralty to send more ships, including two modern battlecruisers , which in turn destroyed Spee and the majority of his squadron on 8 December at the Battle of the Falkland Islands. Eventually, recognising the German squadron's potential for disrupting trade in the Pacific, the British Admiralty decided to destroy it and searched the western Pacific Ocean after the East Asia Squadron had conducted the Bombardment of Papeete 22 September , where a French steamer reported its presence.
On 4 October , the British learned from an intercepted radio message that Spee planned to attack shipping on the trade routes along the west coast of South America.
The change of plan meant that the British squadron comprised obsolete or lightly armed vessels, crewed by inexperienced naval reservists. Scharnhorst and Gneisenau carried eight 8.