<P> The gold specie standard ended in the United Kingdom and the rest of the British Empire at the outbreak of World War I, when Treasury notes replaced the circulation of gold sovereigns and gold half sovereigns . Legally, the gold specie standard was not repealed . The end of the gold standard was successfully effected by the Bank of England through appeals to patriotism urging citizens not to redeem paper money for gold specie . It was only in 1925, when Britain returned to the gold standard in conjunction with Australia and South Africa that the gold specie standard was officially ended . </P> <P> The British Gold Standard Act 1925 both introduced the gold bullion standard and simultaneously repealed the gold specie standard . The new standard ended the circulation of gold specie coins . Instead, the law compelled the authorities to sell gold bullion on demand at a fixed price, but "only in the form of bars containing approximately four hundred ounces troy (12 kg) of fine gold". John Maynard Keynes, citing deflationary dangers, argued against resumption of the gold standard . </P> <P> Many other countries followed Britain in returning to the gold standard, this was followed by a period of relative stability but also deflation . This state of affairs lasted until the Great Depression (1929--1939) forced countries off the gold standard . In September 19, 1931, speculative attacks on the pound forced Britain to abandon the gold standard . Loans from American and French Central Banks of £ 50,000,000 were insufficient and exhausted in a matter of weeks, due to large gold outflows across the Atlantic . The British benefited from this departure . They could now use monetary policy to stimulate the economy . Australia and New Zealand had already left the standard and Canada quickly followed suit . </P> <P> The interwar partially backed gold standard was inherently unstable, because of the conflict between the expansion of liabilities to foreign central banks and the resulting deterioration in the Bank of England's reserve ratio . France was then attempting to make Paris a world class financial center, and it received large gold flows as well . </P>

When did the uk stop using the gold standard