The origins of the E.E.A.
In 1925 the United Kingdom, with a number of other countries, returned to the gold standard, which had been suspended since the outbreak of war in 1914, Under the Gold Standard Act 1925 the Issue Department of the Bank of England was required to exchange sterling for gold bullion at a fixed price. This obligation effectively re-established a system of par values between sterling and other currencies whose values were fixed in terms of gold. The key rate, against the U.S. dollar, was set at £1 =$4.86⅔, the same as in 1914.
The Exchange Equalisation Account - its origins and development