The intensely competitive trade for buffalo robes, furs, and the attendant trade in whiskey ultimately produced the volatile conditions responsible for the Cypress Hills Massacre of June 1, 1873. It was the theft of some horses from a party of American wolfers by the Cree that set in motion the chain of events that culminated in the massacre of a group of Assiniboine a few weeks later in the Cypress Hills. For the Assiniboine, led by Chief Manitupotis (Little Soldier), the winter of 1872-73 was a hard one as food supplies were becoming increasingly scarce on the prairies. At the end of May 1873, the Assiniboine were camped in a valley alongside the north fork of the Milk River; there they were joined by another small band of Assiniboine under Chief Inihan Kinyen. The camps of Little Soldier and Inihan Kinyen together consisted of 300 people, fifty of whom were soldier-warriors.
Close by the camp were two small log forts belonging to wintering White traders representing American companies from Fort Benton: on the west side of the creek was Abel Farwell's post, and on the other side, a few hundred metres to the northeast, was that of Moses Solomon. The Assiniboine had accused Solomon of cheating them and had fired shots into his post; they threatened to “clear out” the traders and kill them all if they resisted. The tension between the Assiniboine and Solomon might have ended without incident had it not been for events that had taken place two weeks earlier in Montana. A group of about a dozen wolfers were returning with their season's take and were only a day's journey from Fort Benton when forty of their horses were stolen. Their large herd of animals had not been closely guarded, as the wolfers had not expected a raid on their camp so close to Fort Benton. After noticing that their horses were missing, Thomas Hardwick, alias the Green River Renegade, and his men attempted to give chase; but recognizing the futility of pursuit, they headed for Fort Benton instead.
The wolfers arrived in the Cypress Hills on the last day of May. They searched for their horses, but Farwell assured them that Little Soldier's band was poor and had very few animals of their own. The gang spent the evening drinking with recently arrived Métis freighters; having no particular business the next day, they began this again early in the morning, with Solomon joining in the festivities. Around noon the situation reached a climax when George Hammond's horse went missing. Cursing in both English and French, he began shouting that the Assiniboine had stolen it, suggesting that they thought they would be rewarded with whiskey if they returned it. Hammond went across to Solomon's and asked the wolfers to join him in seizing some Assiniboine horses in retaliation. These men needed little encouragement: they grabbed their rifles and proceeded toward the Assiniboine camp along with some Métis freighters, all of them sodden with drink. Alexis Labombarde in the meantime had discovered that Hammond's horse had only wandered off, and shouted this to the men rushing toward the Assiniboine camp. Unfortunately it was too late: by this time there were few level heads willing to listen.
It is difficult to ascertain what happened next. Farwell later said that he tried to dissuade the angry men from becoming violent, and that when this failed he waded across the river to the Assiniboine camp. He claimed that there he found an Assiniboine headman and struck a deal by which he would take two Assiniboine horses as security until the missing horse could be found. Farwell knew little or no Assiniboine, but swore afterwards that he had made himself understood and that the headman had agreed. About then, a Métis ran across to the camp to warn the Assiniboine of the approaching danger, and people began to run from the camp.
As some of the Indians spoke to Farwell, Hammond attempted to take two horses from the Assiniboine camp but was stopped by Bighead, an armed warrior. Hammond returned to the wolfers and some of the freighters, who by this time had lined the edge of a coulee that faced the exposed Assiniboine camp on two sides. From the protection of the bush surrounding the coulee, these men were virtually unseen. Fearing the worst, Farwell told the Assiniboine to scatter. Then, according to his own testimony, he went to speak to the wolfers and tried to find Labombarde, who by this time had recovered Hammond's horse; but it was too late. Someone, possibly Hammond, fired a shot, which was followed by indiscriminate fire at the unprotected Assiniboine camp. With Winchester and Henry repeating rifles, the men in the sheltered coulee fired volley after volley into the camp. The Assiniboine tried to fight back, but as they had few modern weapons their situation was hopeless: men, women and children fled from the camp. Most headed for some timber fifty metres to the east; others hid in the bushes lining the coulee or crossed the river. Many were shot as they fled, including Inihan Kinyen. From distant cover, the Assiniboine attempted to return fire, but to no avail. Approximately twenty Assiniboine died in the fighting. This event, one of the most violent episodes in the Canadian west, is generally credited with prompting the federal government's decision to create the North-West Mounted Police to police the region.