I guess, what with being cavalry, their main means of defence when outnumbered was to gallop away. That they could not do so here for some reason has not been touched upon I think (sorry if I missed it). From the pictures of the battlefield there seems to have been no cover at all so it looks as though they were forced by some insuperable circumstance to stand their ground. I assume they got themselves surrounded as well as, apparently, being widely separated. How did that happen?
Once the Indians arrived in force from the Reno fight, Custer was soon surrounded and further movement would have been extremely difficult. There are a number of Indian stories of individual soldiers trying to break through Indian lines. These were chased down and killed. One or more may have been messengers dispatched to try to get through to Reno.
The nature of the terrain was a big factor. It was ill-suited for defense, especially if the enemy had the numbers to surround you. Ideally, you'd like a position where the enemy was in front of you and you had some cover to fire from. Custer's men didn't have that because the Indians were all around. When I say "all around" you shouldn't picture a solid mass of Indians in a ring around Custer. They didn't have the numbers for that. They picked their spots to fire from carefully, and massed at these locations. One of the fascinating things coming out of the 1984 dig was the identification of these spots.
There was no safe place to shelter the horses (though there was a pretty good one in the swale running northeast from Calhoun's position). The horses were stampeded at various stages in the fight and may have carried away spare ammunition in the saddle bags. A number of horses were shot by their owners to try to create cover for the soldiers, especially on Custer Hill.
We just don't know how Custer deployed his five companies after entering Medicine Tail Coulee. We have some hard evidence (mostly bullets and cartridges) of where soldiers were at one point or another but there's no way to put together a detailed, reliable description of Custer's movements.
My thinking is that Custer was maneuvering offensively downstream with little thought that things were turning against him. Judging by the way he left Reno to fight the Indians by himself, I can only surmise that Custer thought Reno had sufficient forces to handle it. For himself, by the time Custer finally realized that he was on the defense, not the offense, it was too late to retreat upstream to rejoin Reno and Benteen. They were too far away and there were too many Indians firing on him. He had no choice but to take up a defensive position as best as he could and try to hold out until help could arrive from Reno and Benteen.
To rejoin Reno and Benteen, Custer would have had to move his five companies in mounted columns over four miles of open country. All the while, the Indians would have been taking up positions behind adjacent ridges and pouring a devastating fire into Custer's exposed columns. Effective return fire would have been impossible because they were mounted and unable to take careful aim. I guess they could have done what Reno did: run like hell, every man from himself.
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