New-York tribune., 1914-11-12
Train Uses Charts to EX-
plain Deals, While De
fence Protests.
H. p. HOWELL BARES
FALSE LOAN SYSTEM
Banker Shows Accused
Mans Acts in Obtain
ing Money.

country lufNmen were piuuEeu my
bewildering mass OF figures when
the prosecution of Henry Siegel got
fairly under way here to-day. An
amazing story Of juggled millions,
muddled bookkeeping and gnarled
financial transactions with which the
prosecution will Try TO prove Sicgel
covered up the crimes nc IS accused OF
was furnished this morning By Arthur
{. Train IN his opening address.
Then came the afternoon session
with more complications, when Her
bert p. Howell. vice-preSident of the
National Bank Of Commerce. IN New
York City. was put on the witness
stand TO tell the jury OF the particular
transactions whereby it is charged
Siegel robbed the bank through loans
obtained by means of false financial
statements.
With the beginning Of the taking OF
testimony came a revelation OF the
has expended in preparation OF the
case. Out of the adjoining grand jury
room. which has been turned into an
arsenal Of evidence, came a dozen great
leogers and scores of documents and
books. borge in by the prosecutions
assistants.
Charts 10 Aid Jury.
Out OF II came, too. for every juror
neat folders containing halftone repro
ductions Of the false statements il is
alleged Siegel made. that they can
STUDY them in detail and follow the
evidence in them. Practically all the
documentary evidence Will be placed
before them in this form. despite the
vigorous protests made by the lawyers
for the defence when this method was
sprung on them.
BY far the most spectacular thing
produced was q dozen large charts
showing in the form of diagrams the
way in which the SieCel-NoCel millions
were juggled, and in tabulated forms
the way they muddled their books.
These charts. attached 10 spring rollers
like huge school maps were hung on
big stand placed before the jury.
John B. Stanchfeld. OF counsel for
Siegel, made violent objection TO this
way OF making the evidence clear 10
the jury; but Judge Clark overruled
him, even allowing Mr.. Train TO use
some of the diagrams 10 illustrate his
opening address.
Nor was this the end of the menac-
ing wonders that are 10 issue from the
legal arsenal. A glimpse in there
shows literally several tons Of books,
ledgers and documents with which II
is hoped to crush Siegels defence.
In the evidence Of Mr.. Howell a
blow was given 20 the plans of the
defence 20 show that il was the late
Frank Vogel, Siegels partner, who had
knowledge Of the falsity Of the state
ments on which the loans were OBJ
tained from the bank. while Siegel had
no such knowledge
Mr.. Howell said that April 3. 1918,
he mad n discussion with Siegel in re-
gard TO the credit statement signed by
Nogel.
Il had a conversation with Mr. Sic
GEL" he said, ain the Office of James
:. Alexander, president of the bank.
We spoke Of the rumors of the un-
soundness Of the 1Ath Street Store, on
which the loan was sought, and he
denied these rumors.
Plea to Increase Loan.
"He then touched on increasing The
loan Of 100000 to 100000. Siegel
said II would not hurt the National
Bank of Commerce 20 have 100000
more invested in the store. lie said
that the store was doing satisfactorily
ard making progress. He also said the
Boston store was making money"
The witness also said in a converse
ton with Vogel on the matter Of the
loan Vogel said the 18th Street Store
was doing S5.000,00 business and
expected TO take over the Rothenberg
store at an early date. Nogel also
said the rumors of financial distress n
the Siegel enterprises we're unfOunded
Reassured by these denials, the bank
finally consented TO discount notes for
100000 on the l4th Street Store after
q financial statement showing a profit
for the year 1913 had been filed with
tnen.
The financial statement Of the con
dition Of the store. he said, showed nc
liabilities in the form of loans from
the other Siegel enterprises.
"If you had known there were any
liabilities not disclosed would yoU
have discounted the note?" Mr.. Trair
asked him. "And II you had knowr
that S1.IOO.0 600 was loaned 10 the 14ti
Street store by Siegel and Vogel, anC
by their enterprises. would you have
discounted the notes? Or if you haC
known there were any substantial in
accuracies in the statement would yot
have discovered the note o. April 29
1892"
1--WE certainly would not" Mr.. How
ell replied.
The witness was crOss-exam med by
Ross NJ. Lowell, Of Elmira. associated
With Mr.. Stanchiel6 In SieRe's de-
fence. Almost the first question he
asked gained an answer that seemed
20 afford him considerable satisfaction
as il brought out that J. =. Morgan
present head OF the Morgan interests
was one of the financial advisers Of the
National Bank Of Commerce when the
Siegcl loan was made. Mr.. Lowell
asked Mr. Howell who made up the
financial committee of the bank.
~. p. Morgan, jr., II. p. Dawson,
Mr. Hine, Frank A. Vanderlip. w. A.
Simonds. Mr. Peabody, A. II. Wiggin,
u. S. Alexander and others whose
names ! don't recall" he replied.
Then Mr. Lowell led Mr.. Howell over
the history of Sicgcl's and VOCels
dealing with the bank since 1904, show
.ng a long list of note transactions
which had al been cleaned up ne or
.ierlv fashion. so that they were out
of the banks debt January I, 1913
He also drew from Er. Howell that
or January T. three weeks before the
alleged false statement was made, a
new loan of 100000 was made.
This seemed TO cheer Mr. Lowell con
siderablv. and he next proceeded to
try 10 get MIR. Howell to say that the
subsequent new loan, made April %
1913. after the filing OF the alleged
false statement. was simply renewal
az the January loan and that the bank
could not lose. u-,,
"Not necessarily So Mr.. Howell
aid. sin fact. we generally look upon
n a. an entirely new Transaction
...o,,d inst q Ir0e Of MS OPEN