The Gold Standard was a system under which nearly all countries fixed the value of their currencies in terms of a specified amount of gold, or linked their currency to that of a country which did so.
The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from the late 1920s to 1932 as well as from 1944 until 1971 when the United States unilaterally terminated convertibility of the US dollar to gold, effectively ending the Bretton Woods system. Many states nonetheless hold substantial gold reserves.
The U.S. issued gold certificates that were identical in face value to their dollar denominations from 1879 until 1934 when the country abandoned the gold standard. U.S. gold certificates now have only collectible value.
Upon taking office in March 1933, U.S. President Franklin D. Roosevelt departed from the gold standard.
The first international agreement on gold came with the signing of the International Monetary Fund’s articles of agreement in July 1944.
The IMF was created in order to rebuild the global monetary system after the Second World War, and its articles laid down that all member countries should establish ‘par values’ for their currencies in terms of gold, or in terms of the US dollar which was itself pegged to gold. One dollar was valued at 0.888671 gram of fine gold, or US$35 an ounce.
The U.S. abandoned the gold standard in 1971 to curb inflation and prevent foreign nations from overburdening the system by redeeming their dollars for gold.