With the advent of the First World War in 1914, came the German naval fleet, commanded by Admiral Von Spee.  They were cruising in the South Atlantic, and after a disastrous British attempt to hunt them down, resulting in the British defeat at Coronel in September 1914, a further British squadron, under Admiral Sturdee, was despatched from England with orders to seek out and destroy the German fleet.

On 7 December 1914 the British squadron, consisting of the two battle cruisers Invincible and Inflexible, the armoured cruisers Carnarvon, Cornwall and Kent, the light cruiser Bristol, the cruiser Glasgow and the armed liner Orama, arrived in Port William, joining the Canopus who was already in port.

The next morning, the lookout on duty for the Canopus saw smoke on the horizon.  The British fleet were immediately warned of the impending arrival of enemy ships, and made ready to engage.  Later Mrs Felton of Fitzroy settlement informed Stanley that three enemy ships, colliers and transports, lay off Port Pleasant (an act which earned her some fame).

With a low lying mist shrouding Stanley two German ships from the fleet broke away, planning to destroy the wireless station and naval base at Stanley, and carry off the Governor in reprisal for the removal of the Governor-General of Samoa.  In the poor visibility they made out four of the British vessels, and miscalculating their size continued towards Port William, from the south, in order to engage.

With the British, still attempting to coal some of their ships, the Kent, Glasgow, Carnarvon, Inflexible, Invincible and the Cornwall left Port William to engage the German vessels.  As the weather cleared the British ships met the German fleet in three separate engagements.  All but two of the eight German ships were sunk, the hospital ship Seydlitz and cruiser Dresden escaping to the Straits of Magellan.  None of the British ships received any serious damage, while the Germans received terrible casualties.

Upon their return to Stanley harbour on 11 December, the British fleet received a tremendous ovation from the population, most of whom had watched the battle from Stanley Common.  8 December 1914 thereby became an important date in local history, and is still commemorated by an annual holiday.