Simultaneous with the passage of Benteen's battalion across his front, Merrill was to mount his men, advance rapidly to flank the rear of Benteen's command, and guard it against Nez Perce sharpshooters who were increasingly posting themselves atop the buttes and ridges surrounding the mouth of the canyon. Benteen followed his intended route without disruption until he reached a point beneath Horse Cache Butte, from the top of which warriors delivered a blistering volley that dropped several men from their saddles as the troops rode past. Otherwise, Benteen's movement, reported Sturgis, "was executed with great promptness and vigor, gallantly driving the enemy before him all the way to and beyond the creek." [57] The captain succeeded in driving out warriors sheltered in a dry bed who fled up the creek to find cover behind rocks near the canyon mouth.

But at that point things went awry for the troops, for Merrill was unable to bring his men ahead as planned to guard Benteen's movement toward the horses. Sturgis later explained that Merrill's men had become exhausted from their having skirmished on foot across nearly three miles of rough terrain, a factor compounded by the failure of the holders to bring the led horses forward for the men to mount. "Either by reason of the difficulty of leading them over such broken ground when tied together in fours, or through some misunderstanding of their orders on the part of those having charge of them, [the horses] had become too far separated from the troops to be available in time." [58] Further complicating matters, a contingent of mounted warriors suddenly appeared near the led horses in the right rear, posing a threat to the ammunition-bearing pack animals and causing Merrill to halt his skirmishers while the warriors' purpose was divined. They proved to be Crows doubtless drawn by the possibility of obtaining Nez Perce mounts. As a consequence of these developments, and with the resulting lack of protection, Benteen scuttled the balance of his maneuver, thus halting his command—and apparently withdrawing it back across the creek—while most of the remaining Nez Perce horses reached the canyon. [59] Yet Sturgis exaggeratedly reported that the tribesmen lost as many as four hundred of their horses that could not gain the canyon mouth before being cut off. Whatever the number, they were undoubtedly captured by the Crows. [60]

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Merrill's men pushed on afoot and reached the mouth of the canyon after the Nez Perces, who left a rearguard of warriors to stiffly contest any further advance by the soldiers. "Here the hardest fighting was done," observed Fisher, "the hostiles having the advantage of being concealed behind the rocks and timber while we were on the open grassy bottom." [61] As long as Nez Perce sharpshooters poised atop the high bluffs and ridges surrounding the canyon entrance effectually controlled access into it, the soldiers lost all hope of gaining a tactical advantage, and Sturgis therefore turned his attention to clearing the heights. Nowlan's Company I was pulled back and placed in reserve on the right, the rest of Merrill's line extending to fill the vacated ground. At Merrill's order, ten soldiers from Company I in charge of Sergeant William Costello dashed their horses west across the valley to scale Horse Cache Butte, from which point they might enfilade the Nez Perces' position. "Orders were given the whole line to advance at the charge as soon as the first shots from Sergeant Costello's party showed that he had gained the bluff." [62] Soon after, Sturgis directed Benteen to lead his troops across the valley and gain a lodgement on the same butte, but beyond Costello. At about 4:00 p.m., that officer started with Companies G and M, joined by the just-arrived Captain Bendire's Company K of the First Cavalry and Otis's battery of one howitzer (the other had fallen into the Yellowstone while crossing), both delayed because of their severely weakened horses. Fisher said that he tried to direct Otis to a place where his gun would be most effective, but to no avail, and "I left him in disgust." [63] The artillery never saw action at Canyon Creek. [64]

Scout Fisher's "Plan of the Battle Ground" of Canyon Creek, September 13, 1877 Montana Historical Society, Helena

According to descriptions given by Private Goldin, Benteen circled Horse Cache Butte to the south side, there passing through a narrow saddle-like aperture where the warriors again fired down on his men from the top of the butte. The soldiers spurred their horses up the steep slope as far as they could, then dismounted and continued their climb, urged onward by Benteen and Captain French, until they emerged on the plateau, deployed as skirmishers, and swept across to the north edge. [65] But by the time Benteen's men gained the height, most of the Nez Perces had withdrawn. Wrote Goldin:

When they reached the top not an Indian was in sight. Not another shot was fired at us. We moved rapidly across the plateau on top of the bluffs [Horse Cache Butte] and dismounting crept cautiously to the edge and peered down into the draw below us. At first we saw only a few fleeing Indians, well out of range, then some one discovered a party of fifteen or twenty in a deep draw, evidently holding some sort of a council. Although they were fully four hundred yards away, we gave them a volley and when the smoke lifted we could see a bare half dozen of them streaking it for safety down the draw, while the others lay there, dead or wounded. [66]

Meanwhile, as Benteen negotiated Horse Cache Butte, Costello's detachment had preceded his men to the top. As shots from Costello's troopers rang out, Merrill's line surged forward and into the canyon causing the warriors to fall back one to two miles into its upper recesses. But this action did not end quickly, as depicted by Fisher:

The Indians were driven very slowly from point to point up the gulch. . . . A squad of cavalry came up the gulch to a point nearly opposite us [scouts], but they did not stop long as the Indians opened a red-hot fire on them and they speedily retreated down the gulch again. We still tried to hold our ground, but the enemy got so numerous among the rocks above us that we could not raise our heads above the bank to shoot without receiving a volley in return. . . . It soon became apparent that we could not do any good by remaining where we were and that we would have to get out. [67]

The cavalrymen had themselves turned about and left the canyon, Captain Bell mounting his company in column of fours"a foolhardy thing to do under fire," recalled Private Edwin F. Pickard. Merrill's men moved to the north side of Canyon Creek, where Company H, which had served as rearguard during the day's activities, joined them. This unit, commanded by Lieutenant Fuller and supported by Wilkinson's Company L, moved some eighteen hundred yards to the rimrock along the east side of the valley, there to scale the bluffs and "secure a lodgement." Farther to the right, Nowlan's I Company attempted the same. Captain Bell, meanwhile, led Company F back up the canyon to guard against any surprises by the Nez Perces against Fuller and Nowlan. Although the warriors tried to counter this movement, the attempt by the soldiers to surmount the perpendicular upper escarpment failed because of physical impossibility"unscalable for even a goat," wrote Benteen. Wilkinson's covering gunfire proved ineffective because the warriors were well hidden behind overhanging rocks, and Fuller, at Sturgis's direction, presently withdrew to protect the hospital. Nowlan and Wilkinson in turn rode to the relief of Bell, who had become engaged with warriors in the upper part of the canyon. The major fighting, which had started at about 11:30 a.m., was over by 4:30 or 5:00 p.m. By nightfall, the Nez Perces had departed, leaving the troops to return to the mouth of the canyon, where Sturgis had set up his field hospital and where, it was learned, the Crows had advantaged themselves of the day's distractions, appropriating many items of personal equipment as well as some horses and pack animals. "The Crows took no part in the fight," protested Fisher, "but staid in the rear and stole every thing they could get their hands on." [68]