Sitting Bull's band of the Hunkpapas continued to make attacks on emigrant parties and forts in the late 1860s. In 1871, the Northern Pacific Railway conducted a survey for a route across the northern plains directly through Hunkpapa lands and encountered stiff Sioux resistance. They returned the following year accompanied by federal troops. The survey party was again attacked by Sitting Bull and the Hunkpapa and was forced to turn back. In 1873, the military accompaniment for the surveyors was considerably larger, but Sitting Bull's forces resisted this survey "most vigorously."
The Panic of 1873 forced the backers (such as Jay Cooke) of the Northern Pacific Railway's into bankruptcy. This halted the construction of the railroad through Sioux territory, but also encouraged interest in the possibility of gold mining in the Black Hills. A military expedition led by Lt. Col. George Armstrong Custer in 1874 left from Fort Abraham Lincoln, near Bismarck, to explore the Black Hills for gold and to determine a suitable location for a military fort in the Hills. Custer's announcement of gold in the Black Hills triggered the Black Hills Gold Rush and increased tensions between the Sioux and whites seeking to move into the Black Hills.
Although Sitting Bull did not attack Custer's expedition in 1874, the government was increasingly pressured to open the Black Hills to mining and settlement based on reports of Sioux depredations (encouraged by Sitting Bull). In November 1875, the government accordingly ordered all Sioux bands outside the Great Sioux Reservation to move onto the reservation, with the knowledge that these bands would not comply. These bands living off the reservation were certified by the Interior Department as hostile on February 1, 1876. This certification allowed the military to pursue the Sioux and Sitting Bull.
Battle of Little Bighorn
The period between 1868-1876 should be seen as the time over which Sitting Bull developed into the most important of Native American Chiefs. After the Laramie Treaty of 1868 and the creation of the Great Sioux Reservation, many traditional Sioux warriors such as Red Cloud of the Oglala and Spotted Tail of the Brule came to reside permanently on the reservations and lived a life of dependency upon the Native American Agencies. Many other chiefs, including members of Sitting Bull's own Hunkpapa band such as Gall, at times temporarily adopted a residence at the agencies. This was because they offered supplies at a time when the white encroachment and the depletion of the buffalo stock challenged a life of complete Native American independence. Sitting Bull, however, intransigently refused to adopt any sort of dependence on the white man. During this period, at times this meant that Sitting Bull was left isolated on the plains with a small band of warriors. However at times when the Native Americans and Native American land came under threat from the United States, Native Americans of a multitude of Sioux bands and other Native American tribes such as the North Cheyenne came to Sitting Bull's camp. His reputation for "strong medicine" developed as he continued to evade the whites. After the January 1st Ultimatum, when the United States army tracked down Native Americans living off the reservation for extermination, Native Americans flocked to Sitting Bull's camp. Sitting Bull also took an active role in encouraging this "unity camp", sending scouts to the reservations to try and lure away agency Native Americans and also telling his Hunkpapa to share their supplies with the Native Americans that joined them. An example of this generosity is Sitting Bull's response to Wooden Leg's Northern Cheyenne tribe. Where the North Cheyenne who had been impoverished by Captain Reynold's attack, fled to Sitting Bull's camp for safety. The Hunkpapa chief duly provided the resources to sustain his new recruits. This was clearly self fulfilling, with Native Americans being attracted to the safety of this growing camp and its reputation for generosity. Over the course of the first half of 1876, Sitting Bull's camp continually expanded as the Native Americans sought safety in numbers. It was this camp that Custer found on June 25 1876. Sitting Bull did not take a direct military role in the ensuing battle, as a head chief he was charged with defensive responsibilities. Nevertheless it was his intransigence and leadership abilities that had attracted such a large village together in the first place capable of defeating Custer.
On June 25, 1876, Custer’s 7th Cavalry advance party of General Alfred Howe Terry’s column attacked Native American tribes at their camp on the Little Big Horn River expecting a similar victory. The U.S. army did not realize that before the battle began, more than 2,000 Native Americans had left their reservations to follow Sitting Bull. The attacking Sioux, inspired by a vision of Sitting Bull’s, in which he saw U.S. soldiers being killed as they entered the tribe’s camp, fought back. Custer's badly outnumbered troops lost ground quickly and were forced to retreat, as they began to realize the true numbers of the Native American force. The tribes then led a counter-attack against the soldiers on a nearby ridge, ultimately annihilating the soldiers.
The Native Americans' celebrations were short-lived, however, as public outrage at Custer's death and defeat and the heightened awareness of the remaining Sioux brought thousands more soldiers to the area. Over the next year, the new American military forces pursued the Lakota, forcing many of the Native Americans to surrender. Sitting Bull refused to surrender and in May 1877 led his band across the border into Saskatchewan, Canada where he remained in exile for many years near Wood Mountain, refusing a pardon and the chance to return.