The formation of the Kelly gang occurred in October 1878. The group gathered more by circumstance rather than intention, although the four members soon found that they had a great deal in common. All of Irish Catholic stock and all the sons of selectors, the four had also all served time on charges relating to stock theft. All four were young and single. Joseph Byrne, born in 1857, had become great friends with Ned some years earlier, while Steve Hart, born in 1869, was to be remembered as predicting he would have ‘a short life and a merry one’ as he rode off on his horse to join the other members.
The ‘Kelly outbreak’ of 1878 was crucial in the hunt for the gang members. Initially wanted by the police on lesser charges, the incident at Stringybark Creek increased dramatically the seriousness of the Kelly gang’s crimes. The conflict was used by authorities to exemplify the need for police presence in the district.
On 9 October 1878, the Kelly boys’ mother, Ellen, their friend, Brickey Williamson, and their brother-in-law, William Skillion, stood trial before the formidable Judge, Sir Redmond Barry, at Beechworth, on charges related to the incident with Constable Fitzpatrick. All three were found guilty. Mrs Kelly was sentenced to three years’ hard labour, whilst Skillion and Williamson each received a six-year sentence.
Meanwhile, the newly-created North Eastern Police District had appointed Superintendent Sadleir as the officer in charge of the district. Superintendent Sadleir organised a search party, headed by Sergeant Kennedy, to search the Upper King Country along with Constables Lonigan, Scanlon and McIntyre for the cattle-rustling Kellys. By this stage, the Kelly gang had gone into hiding in the hills to the north of Mansfield and had set up camp not far from Stringybark Creek.
On the morning of 26 October, Sergeant Kennedy and Constable Scanlon mounted their horses and left their campsite at Stringybark Creek to search the surroundings, while Constables McIntyre and Lonigan remained behind. Around noon, the Kelly party tracked their way to the police camp after hearing McIntyre shoot at some parrots. £8000 reward had been posted for Ned’s capture and he was well aware that a search party had been sent out to look for them. Upon hearing the gunshots, Ned and the gang hurriedly devised a plan to ambush the police camp. At around 5-6 o’clock that evening, the cry of ‘Bail up! Hold up your hands’ was heard through the camp.
McIntyre and Ned gave different accounts of the incident. McIntyre claimed that he was facing Ned and that he saw him fire at Lonigan, although, as he had his back to Lonigan, he never actually saw him fall down. Another version of this account has Lonigan under cover behind the logs preparing to shoot at Ned. While the first account portrays the murder as cold-blooded, the latter account provides Ned with a self-defence motive.
Ned’s bullet killed Lonigan instantly. In the distance, the sound of horses approaching could be heard. The gang separated and hid near the camp to ambush Kennedy and Scanlon as they approached. In the confusion, McIntyre seized the opportunity to make his escape and Sergeant Kennedy was shot dead about a half-mile away from the actual camp. The gang then rifled through the pockets of the dead police officers, taking their valuable personal possessions, including a ring and watch.
In both the Jerilderie and Euroa Letters, Ned records his account of what transpired that afternoon. His account of the death of Constable Lonigan differs considerably from that of Constable McIntyre.
Arriving at the Mansfield police station around 4pm the day after the shootout, McIntyre informed newly-appointed Sub-Inspector Pewtress of the shootings and telegrams were sent throughout the state informing the police of the tragedy. Descriptions of the murderers were also sent out. Pewtress organised a search party and along with McIntyre returned to the campsite to recover the bodies of Scanlon and Lonigan. The body of Sergeant Kennedy was found a few days later.
Shortly after the shooting, Victoria’s Premier, Graham Berry, announced a reward of £800, £200 per outlaw, for Dan and Ned Kelly and the two unknown gang members. New South Wales (NSW) had also issued warrants for the four gang members. Superintendent Nicolson was officially placed in charge of the Kelly pursuit, which proved to be difficult due to rising floodwaters.
Three days after the incident, the gang were officially declared outlaws because of the severity of the crimes. The Felons Apprehension Act was passed for the first time. Notices were published throughout Victoria and the outlaws were given until 12 November 1878 to surrender. Meanwhile, Nicolson’s search party had expanded, and a system using agents was introduced, including the Sherritt brothers, Aaron and James. The Kelly family was placed under surveillance and Kelly acquaintances serving time in prison were questioned. A few days later the police were able to recover the horses from Stringybark Creek and had engaged the services of both Aaron and James Sherritt as spies for the police.
At this time, photographs of each gang member were sent through the north-east district. With each day that passed, the tracks left by the gang slowly disappeared, making the hunt difficult, even for the native trackers sent down from Queensland. Towards the end of November, Nicolson and Superintendent Sadleir made their way to Albury to discuss a plan of capture with the NSW police.