New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-11-20
Confidential Clerk Un-
ravels Snarl of Deals
That Hid Losses.
CHARGES S2,27S,SS2
FRAUD IN ONE STORE
Two Sets of Books and
Rubber Stamp Yelled
Swindle, He Asserts.

othcbcOt ~ ANoF. bs--IsHEY o1e-
gel and his attorneys gathered in the
village hotel after the close of court
tonight and consulted in gloomy whis-
pers, for they had just passed through
the most adverse day of the trial Their
faces showed their encouragement and
Siegel's manner particularly was down
hearted.
Other nights he has chatted soeiably
in the lobby while waiting for dinner
drawn and gray, the lines of his years
showing plainly. His attorneys we're
in scarcely better spirits. for the last
two hours Of the afternoon session had
been taken up by the testimony of Os-
car A. Prall. the man who was more
completely in Siegers confidence than
any one else.
Prsll told without stint about the
way he had helped Siegel make his
credit statements. and he called them
"falsifications" without reservation. In
every one that he told about, he testi-
fed, SiegeI had a premeditated and in
territorial part.
PralPs testimony was all that was
needed to put full significance into the
expert analysis of the Siegel books
presented by John Flint, who immedi-
ately preceded Prall on the witness
stand. Flint, too, had been a hard ex-
perience for the defence, for in Cross
examination by II. B. Lowell, Of coun
sci for Siegel, the attorney was defeat
ed at every turn.
Alleged Frauds Barred.
Lowell finally gave it up, and sat
down in obvious rage at the way IN
which Flint had scored on him. Then
came Prall. One after another the
charts bearing the tabulations Of fhe
alleged falsihed credit statements OF
the Siegel stores were shown him. On
these Flint had indicated discrepancies
Of millions Of dollars between the
actual condition Of the stores and the
condition shown in the statements.
These discrepancies, Flint had testified,
were brought about by concealing and
undertaking liabilities and overstating
assets.
"Is this statement true?" Arthur
Train, the prosecutor, asked, holding
up sheet.
at is not; it is false" replied Prall,
letting his voice drop.
"How was this credit statement pre-
?" asked Train.
81 had figures before me showing the
actual condition of the store, also the
credit statement for 1912" the witness
replied.
How did you arrive at the amount
1867 ,521 IS opposite merchandise in the
asset schedule?"
"The figures are arbitrary, based on
the figures of the previous year, which
we're also arbitrary" said Prsll.
How did you arrive at the amount
Of cash OF hand stated as an asset"
"By arbitrary figures" said Prall.
1--WE did not compute it. We put down
anything that looked good"
at the time you made this credit
statement on which you obtained loan
from the National Bank Of Commerce,
what was the condition of the Four
teenth Street Store"
"The capital was wiped out, and tho
store was nearly 100000 in debt"
Other statements made for the Four
teenth Street Store and for the Boston
store were put through the same pro-
cess; always the figures were described
as purely arbitrary.
The padding in the statement for the
Boston store amounted to s2,27s $50 81,
Prall asserted. The store, he said, lost
more than s2,O0O,OOO.
Then was read into the record a GER
ti6cate of condition for the corpora
tion called for in sworn statement
nv the laws of the State of Massachu-
setts, signed by Henry Siegel.
History Of Enterprises.
Prall's story went back to 1908, when
no first became connected with Siegels
enterprises, first as auditor Of the
Simpson- Crawford store, then manager
of the main office, and later also secre-
tarv Of the Fourteenth Street Store.
"In 1904, just before the annual
meeting" he said, 81 had conversa-
tion with Mr.. Siegel. The inventory
had been taken, and the stocks came
out very bad, showing we had made
loss. Creditors we're pressing, and 1t
WAS necessary to borrow money, so
s125.OOO was added to the inventory.
II WAS done in this way-the stocks IN
the various departments had the values
opposite them, and Siegel set down
sums opposite these values TO be added,
increasing the total by Sl25,000. This
was carried into the ledger OF the mer-
chandise account.
1.-TWO days after that Siegel told me
some investors were going TO look over
the property.
"He told me To take the inventories
and make them agree, and Tor TWO
whole days and nights ] worked In
private Office raising items 80 that the
Continued on page 4, column