As the political crisis in Europe slid towards war in late July 1914, the German East Asiatic Squadron was scattered across the Pacific. The Scharnhorst, Gneisenau and Nürnberg were due to leave Ponape in the Caroline Islands in late July, but delayed their departure as Ponape had good radio communications with Europe and news of the deteriorating situation could be relayed faster. Emden was at Tsingtau (China), and Leipzig off the Mexican Pacific coast, where it had been helping evacuate foreign nationals trapped by the Mexican revolution. At the outbreak of war, the light cruiser Dresden was in the Caribbean and due to return to Germany. Rather than attempt to run the gauntlet of Royal Navy patrols in the English Channel and North Sea, the Dresden sailed south along the South American Atlantic coast towards the Pacific.
Austria had declared war on Serbia on 28 July 1914 which had been followed by Russia mobilising in support of Serbia and Germany threatening war against Russia. On 2 August 1914 Germany was at war with France and Russia, and a day later, with Great Britain. At the outbreak of war, von Spee ordered all German ships in the western Pacific to rendevous at Pagan in the Marianas Islands. A collection of merchant ships together with the Scharnhorst, Gneisenau, Nürnberg and Emden arrived at Pagan on 11 August where they discussed tactics. The German High Command had given standing orders to all naval commanders that in the event of war they were not to attempt to return to Germany, but to remain at sea and attack enemy shipping to the best of their ability.
With Tsingtau the only fortified supply base, von Spee had to decide whether to risk his ships being trapped at Tsingtau should Japan enter the war (which it did on 23 August) or try to keep his ships supplied with coal by raiding enemy ships and purchasing coal from neutral territories. The Scharnhorst and Gneisenau had a range of 2,200 miles (3,500 kms) or 4½ days at normal speeds before needing to replenish their supply of coal. While sailing west into the Indian Ocean offered the best opportunities for attacking enemy shipping, there were no friendly ports to supply coal and there was unlikely to be sufficient enemy shipping to capture enough coal to keep four cruisers supplied. By 13 August, von Spee had agreed to detach the Emden to raid enemy shipping in the Indian Ocean, correctly assuming there would be enough shipping to be captured to keep the Emden supplied with coal. The rest of the fleet, including a number of merchant ships and the little armed collier Titania, set off eastwards on towards South America.
At the outbreak of war, the Pacific based ships of Britain, France, and Australia were supposed to come under the command of Admiral Jerram in Hong Kong. However it took a number of days for this to happen and precious time was lost organising ship movements. While hunting for von Spee's squadron was important, the immediate military priority was to seize the German colonies. The New Zealand army quickly reported it was ready to attack Samoa, some 1,700 miles (2,700 kms) to the north-east of New Zealand, but the three obsolete British 3rd class cruisers assigned to New Zealand waters were hopelessly inadequate protection for the troop ships. The Australian battle cruiser Australia was diverted from its patrol in the Bismarck Archipelago to rendevous with the invasion ships, which included the Australian light cruiser Melbourne, British 3rd class cruiser Philomel and French cruiser Montcalm in New Caledonia, from where they attacked and captured the German colony at Samoa on 30 August. The Australian army was also preparing to attack German territories in New Guinea and the light cruiser Sydney and 3rd class cruiser Encounter were readied to escort the troop ships. As a result, all the fast modern warships in the region were assigned to troop ship protection during August.
In Hong Kong, the pre-dreadnought battleship Triumph was quickly taken out of the reserve fleet and a crew hastily formed from soldiers and volunteers, some of whom had never been to sea. Unlike German captains, who were given a free hand to decide tactics, the Royal Navy operated through a strict central command structure, and local commanders and captains had limited discretion to take unilateral action. Consequently, the British Admiralty's insistence on using this slow battleship in the early search for the German cruisers partly contributed to the Emden's success in breaking through into the Indian Ocean.