The difficulties of the Treasury when Dallas took charge of it were not easily exaggerated. His own description,[356] given some six weeks afterward, made no disguise of them. “The Treasury,” he said, “was suffering under every kind of embarrassment. The demands upon it were great in amount, while the means to satisfy them were comparatively small, precarious in collection, and difficult in their application.... The means consisted, first, of the fragment of an authority to borrow money when nobody was disposed to lend, and to issue Treasury notes which none but necessitous creditors or contractors in distress ... seemed willing to accept;” second, of bank-credits, chiefly in the South and West, rendered largely useless by the suspension of specie payments; third, of the current receipts of taxes, also useless because paid chiefly in Treasury notes. The Treasury was bankrupt. The formal stoppage of payments in interest on the debt was announced, November 9, by an official letter from the secretary, notifying holders of government securities in Boston that the Treasury could not meet its obligations, and that “the government was unable to avert or to control this course of events.”[357] After that date the Treasury made no further pretence of solvency. From this situation the government could be rescued only by a great effort; and obviously the currency must be first restored, for until some system of exchange could be established, every increase of taxation would merely increase unavailable bank deposits. Fifty millions of Southern bank-notes, locked in the vaults of Southern banks, would not pay the over-due interest on government bonds at Boston. To this subject every one turned, but the schemes that seemed to have a chance of adoption were only two. The first came from President Jefferson, and was strongly pressed by the South. As Jefferson explained it, the plan seemed as simple as his plans were apt to be; he proposed to issue twenty millions in promissory notes every year as long as might be necessary. “Our experience,” he told the President,[358] “has proved it [a paper currency] may be run up to two or three hundred millions without more than doubling what would be the prices of things under a sufficient medium, or say a metallic one.” His plan included an increase of taxation by two million dollars every year to redeem the same amount of Treasury issues. Obviously the insuperable obstacle to this plan was the paper money of the State banks, which already stood at discounts varying from ten to fifty per cent in specie, and in any large quantity could not be discounted at all. Until private paper should be abolished, public or government paper could not be brought into common use. Jefferson’s views on this, as on the whole subject, were interesting.