Martin Harris says Joseph used the seer stone in a hat to translate the BOM.
"The Three Witnesses to the Book of Mormon," The Latter-day Saints' Millennial Star 48, no. 25 (June 21, 1886): 389-390
He [Martin Harris] also stated that the Prophet translated a portion of the Book of Mormon, with the seer stone in his possession. The stone was placed in a hat that was used for that purpose, and with the aid of this seer stone the Prophet would read sentence by sentence as Martin wrote, and if he made any mistake the sentence would remain before the Prophet until corrected, when another sentence would appear. When they became weary, as it was continuing work to translate from the plates of gold, they would go down to the river and throw stones into the water for exercise. Martin on one occasion picked up a stone resembling the one with which they were translating, and on resuming their work Martin placed the false stone in the hat. He said that the Prophet looked quietly for a long time, when he raised his head and said: “Martin, what on earth is the matter, all is dark as Egypt.” Martin smiled and the seer discovered that the wrong stone was placed in the hat. When he asked Martin why he had done so he replied, to stop the mouths of fools who had declared that the Prophet knew by heart all that he told him to write, and did not see by the seer stone; when the true stone was placed in the hat, the translation was resumed, as usual.