Carrington's orders were to garrison Fort Reno and build new forts on the Powder, Big Horn, and Yellowstone rivers, and cover the road. The last-named fort was later cut away because of his insufficient force, but Fort Philip Kearney and Fort C. F. Smith were located during July and August. The former stood on a little plateau formed between the two Pineys as they emerge from the Big Horn Mountains. Its site was surveyed and occupied on July 15. Already Carrington was complaining that he had too few men for his work. With eight companies of eighty men each, and most of these new recruits, he had to garrison his long line, all the while building and protecting his stockades and fortifications. "I am my own engineer, draughtsman, and visit my pickets and guards nightly, with scarcely a day or night without attempts to steal stock." Worse than this, his military equipment was inadequate. Only his band, specially armed for the expedition, had Spencer carbines and enough ammunition. His main force, still armed with Springfield rifles, had under fifty rounds to the man.
The Indians, Cheyenne and Sioux, were, all through the summer, showing no sign of accepting the invasion of the hunting-grounds without a fight. Yet Carrington reported on August 29 that he was holding them off; that Fort C. F. Smith on the Big Horn had been occupied; that parties of fifty well-armed men could get through safely if they were careful. The Indians, he said, "are bent on robbery; they only fight when assured of personal security and remunerative stealings; they are divided among themselves."
With the sites for forts C. F. Smith and Philip Kearney selected, the work of construction proceeded during the autumn. A sawmill, sent out from the states, was kept hard at work. Wood was cut on the adjacent hills and speedily converted into cabins and palisades which approached completion before winter set in. It was construction during a state of siege, however. Instead of pacifying the valley the construction of the forts aggravated the Sioux hostility so that constant watchfulness was needed. That the trains sent out to gather wood were not seriously injured was due to rigorous discipline. The wagons moved twenty or more at a time, with guards, and in two parallel columns. At first sight of Indians they drove into corral and signalled back to the lookouts at the fort for help. Occasionally men were indeed cut out by the Indians, who in turn suffered considerable loss; but Carrington reduced his own losses to a minimum. Friendly Indians were rarely seen. They were allowed to come to the fort, by the main road and with a white flag, but few availed themselves of the privilege. The Sioux were up in arms, and in large numbers hung about the Tongue and Powder river valleys waiting for their chance.