Evening star., 1946-03-25
Coercion Denied
In vardaman
CaseAffidavits
Two Ex-Emp!oyes
Admitted Padding
Figures, Witness Says
BY the Associated Press

BY the Associated Press
Frank E. Williams. st. Louis
attorney. testified today that two
former employees of James K
Vardaman. jr., voluntarily signed
affidavits that they padded" an
inventory under the command
and coercion of Mr.. Vardaman. ~
Mr.. Williams testified under oath
to the Senate Banking Subcommit-
tee considering the nomination of
Commodore Vardaman, President
Truman's naval aide, for a 14-year
term on the Federal Reserve Board
of Governors.
Mr.. Williams identified the affi-
davit signers as Samuel E. Reyburn.
then superintendent of a shoe fac
tory for the Vardaman Co., and Paul
de Coster, then controller for the
Vardaman Shoe Co.
Admitted Signing.
Both Mr.. Reyburn and Mr.. de
Coster have testified that they
signed statements in Mr.. Williams
office, but they insisted these were
given under pressure from Frank o.
Bittner, jr. Mr.. de Coster said they
contained some statements that
were mot true"
Mr.. Bittner testified he was ode
frauded' in purchase of 9,375 shares
of stock in the Vardaman Shoe Co.
from Commodore Vardaman less
than a month before the company
was reorganized in bankruptcy early
in 1912.
Commodore Vardaman referred to
the padded" inventory in his initial
testimony as a crude" job, adding
that when he discovered it he di-
rected new inventory that showed
the shoe company insolvent, so he
signed the bankruptcy reorganiza-
tion petition.
Both Mr.. Reyburn and Mr.,
De Coster testified last week that
Mr.. Williams had agreed to serve
as their attorney in case of any
legal difficulties arising from the
af1davits and Mr. Williams said this
was true on the part of De Coster
Appeared Voluntarily.
Mr.. Williams, vino had asked to
be subpoenaed but appeared volun-
tarily, offered this account of his
connection with the Vardaman Shoe
Co. reorganization.
Early in 1912 Henry Cook, repre-
senting majority of stockholders
OF the Vardaman Co., came to Mr..
Williams with report that an in
ventory had been padded" and Mr..
Williams advised an immediate cor
rect inventory.
On January 28 Mr.. Bittner asked
Mr.. Williams to act as his attorney
and file a suit against Commodore
Vardaman on the stock purchase.
Williams said he advised Bittner
this was a very serious charge
against Mr.. Vardaman," adding that
as a lawyer he could not file such a
suit unless backed by written state
ments or afidavits."
Mr.. Bittner next appeared with
Mr.. Reyburn, the factory superin-
tendent, who made an affidavit that
he had been advised "by Mr.. De
Coster and Mr.. Varoaman" it was
necessary to make changes" in the
inventory in order to show the com
pany solvent"
"Mr. Reyburn went back to the
factory and made such changes to
show the company solvent" Mr..
Williams said.
Next, De Coster appeared and
signed an affidavit, but Mr.. williams
said he was uncertain he should tes-
THY about its contents because of
the relationship between attorney
and client.
Had Claimed Coercion.
Both Mr.. Reyburn and Mr.. De
Coster testified earlier that pressure
caused them to sign the affidavits,
but Mr.. Williams denied this.
There was no force, coercion, or
intimidation" Mr.. Williams said
adding that as an attorney he would
mot permit this"
Senator Millikin, Republican, of
Colorado asked why the two en-
ployes would sign such affidavits.
They wanted to make a clean
breast" Mr.. Williams replied.
Mr.. Williams said that both Mr..
De Coster and Mr.. Reyburp later
became fearful of possible results
of signing the affidavit and so Mr.,
Williams arranged a night confer
ence with Sigmund Bass, identified
by Mr.. Williams as a very honest
and capable" criminal lawyer in st.
Louis.
Mr.. Bass assured Mr.. Reyburn and
Mr.. De Coster, Mr. Williams said,
they had nothing to fear because
the padded inventory" had not