Throughout August, September and October, 1914, the system operated perfectly. Bernstorff and Boy-Ed were confronted with the problem of keeping the German fleet alive as long as possible, and inflicting as much damage as possible on enemy shipping. Allied merchantmen left port almost with impunity, and were gathered in by German raiders who had been informed from Washington of the location of their prey. But the defeat off Chile apparently was conclusive proof to England that Germany knew her naval code, and the events of November and December indicate that England changed her code.
It was while engaged in escort duty to the first transport fleet of the Australian Expeditionary Force that the Australian cruiser _Sydney_ received wireless signals from Cocos Island shrieking that the _Emden_ was near by. The _Emden_, having been deprived for some time of news of enemy ships, had gone there to destroy the wireless station, having in the past three months sunk some $12,500,000 of British shipping. Even while the island's distress signals were crashing out, the _Emden_ had her own wireless busy in an effort to drown the call for help, or "jam" the air. On the following morning, November 9, the _Sydney_ came up with the enemy. A sharp action followed. The _Sydney's_ gunfire was accurate enough to cause the death of 7 officers and 108 men; her own losses were 4 killed and 12 wounded; the _Emden_ fled, ran aground on North Keeling Island, one of the Cocos group, and ultimately became a total wreck.
In the same month the cruiser _Geier_ fled the approach of the British and found refuge in Honolulu harbor. Her commander, Captain Karl Grasshof, made the mistake of keeping a diary. That document, which later fell into the hands of the Navy Intelligence Service, revealed a complete disrespect for the hospitality which the American government afforded the refugees. The _Geier's_ band used to strike up for an afternoon concert, and under cover of the music, the wireless apparatus sent out messages to raiders at sea or messages in English so phrased as to start rumors of trouble between Japan and the United States. The _Geier_ was the source of a rumor to the effect that Japanese troops had landed in Mexico; the _Geier_ gave what circulation she could to a report that Germans in the United States were planning an invasion of Canada and was ably assisted in this effort by George Rodiek, German consul at Honolulu; the _Geier_ caught all trans-Pacific wireless messages, and intercepted numerous United States government despatches. Captain Grasshof also spread a report quoting an American submarine commander as saying he would "like to do something to those Japs outside" (referring to the Japanese Pacific patrol) provided he (the American commander) and the German could reach an agreement. This report Grasshof attributed to von Papen, and later retracted, admitting that it was a lie. Grasshof's courier to the consulate in San Francisco was A. V. Kircheisen, a quartermaster on the liner _China_, a German secret service agent bearing the number K-17. Kircheisen frequently used the _China's_ wireless to send German messages.