The squadron under my command, composed of the large cruisers _Scharnhorst_ and _Gneisenau_, and the small cruisers _Nürnberg_, _Leipzig_, and _Dresden_, reached on November 1st a point about twenty sea miles from the Chilean coast, in order to attack a British cruiser which, according to trustworthy information, had reached the locality on the previous evening. On the way to the spot the small cruisers were several times thrown out on the flanks to observe steamers and sailing ships. At 4.15 P.M. the _Nürnberg_, which was detached on one of these missions, was lost sight of to the north-east, while the _Dresden_ remained about twelve sea miles behind. With the bulk of the fleet, I was about forty miles north of Arauco Bay. At 4.17 P.M. there were sighted to the south-west at first two ships, and then at 4.25 P.M. a third ship about fifteen miles away. Two of them were identified as warships, and were presumed to be the _Monmouth_ and _Glasgow_, while the third was evidently the auxiliary cruiser _Otranto_. They, too, seemed to be on a southerly course. The squadron steamed at full speed in pursuit, keeping the enemy four points to the starboard. The wind was south, force 6, with a correspondingly high sea, so that I had to be careful not to be manœuvred into a lee position. Moreover, the course chosen helped to cut off the enemy from the neutral coast. About 4.35 P.M. it was seen that the enemy ships were steering to the west, and I gradually changed my course south-west, the _Scharnhorst_ working up 22 knots, while the _Gneisenau_ and the _Leipzig_ slowed down. The enemy's numerous wireless messages were 'jammed' as far as possible. At 5.20 the arrival of another warship was reported which took the head of the line, and was identified as the _Good Hope_, the flagship of Rear-Admiral Cradock. The enemy ships now got into battle formation, hoisted their mast-head flags, and tried slowly to approach a southerly course. From 5.35 P.M. onwards I held to a south-westerly course, and later to southerly course, and reduced speed to enable my own ships to come up. At 6.7 both lines--except _Dresden_, which was about one mile astern, and the _Nürnberg_, which was at a considerable distance--were on an almost parallel southerly course, the distance separating them being 135 hectometres (14,760 yards). At 6.20, when at a distance of 124 hectometres, I altered my course one point towards the enemy, and at 6.34 opened fire at a range of 104 hectometres. There was a head wind and sea, and the ships rolled and pitched heavily, particularly the small cruisers, on both sides.