A country on the gold standard agrees, by definition, to convert its currency freely into gold through its central bank. At one time the U.K. currency was backed by gold and silver - a bimetallic standard. By the early nineteenth century silver had been discarded and the U.K. used only gold to back its currency. This state of affairs prevailed until the gold standard was abolished, provisionally in 1914 and finally in 1931 - though from 1925 to 1931 the standard was known as the gold bullion standard. Prior to the abolition of the gold standard in 1931 the note issue of the U.K. was backed by gold and the promise to pay on a £1 note meant that if such a note was presented at the Bank of England for payment in gold then that promise would be honoured. Since then the promise means only that the note will be treated as legal tender for the amount printed on it.
|Reference: The Penguin Business Dictionary, 3rd edt.|