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Answer: This movie predates the more advanced CGI that would be used these days. In older films, actors portraying an amputee would have their leg (or arm) bent back and strapped to their body. A prosthetic peg leg would be attacked to the lower appendage. The actors were also filmed from strategic vantage points so the bent part of the limb didn't show. When Douglas is seen driving a wagon, the seat was probably constructed so that his lower leg fit into a hidden compartment and the peg leg was attached on top to be visible. Douglas also wore rather baggy pants, and that would help conceal his bent leg.

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