In one sense, President Nixon’s default on America’s promise to exchange dollars for gold at $35 an ounce was a mercy killing. The gold standard had been dying since 1914 and the onset of Worth War One. What remained on August 15, 1971 was — so it seemed — a kind of monetary husk. It proved to be much more.

Imagine a well-officiated game of tennis. There are backlines and sidelines. There is a chair umpire, and there are linesmen. Most of all, there is a net.

In the tennis game of the classical gold standard, gold did not “back” the currency; it defined it. Anyone could exchange gold for paper currency, and vice versa, at the statutory rate, on demand. It was the right of conversion that checked the tendency of banks, their customers, and governments alike to run riot.

However, there was a catch. The integrity of the national promise to redeem currency in gold was the central bank’s principal operational objective. Domestic considerations — growth and employment, if such things were even measured — came second.

The classical gold standard was borderless. Money was free to come and go, and it went where it was welcome. Low inflation and high investment returns attracted it. Financial mismanagement repelled it. Unplanned, the system was largely unmanaged.

On that Sunday night in 1971, as Richard Nixon stared into the TV cameras to vow “that the American dollar must never again be a hostage in the hands of international speculators,” little remained of that gold standard but the contents of Fort Knox.

The Bretton Woods monetary system, a creation of John Maynard Keynes who might as well have taken inspiration from the Sun’s own Rube Goldberg, was a different kind of gold regime. It stipulated that only foreign governments could exchange their dollars for gold (for American citizens, gold itself had become a contraband in 1933). Design features permitted exchange controls and devaluations, each an offense to pre-1914 sensibilities.

And when, as early as 1960, the gold price touched $40.50 in London trading, it became clear that the United States was either holding too little gold or printing too many dollars. How would Washington respond?

Higher interest rates and balanced budgets were the clear choice under classical rules, but the Kennedy and Johnson administrations chose palliative care: “Operation Twist” (higher short rates coupled with lower long rates), “Roosa bonds” (dollar-denominated securities designed to replace volatile overseas short-term dollar deposits), and other such dodges.

The promise that Nixon took to the airways to break proved to be, in fact, the final check on the inflationary impulses of the modern age. The Kennedy and Johnson administrations had obliterated the sidelines and the base lines on the monetary tennis court. It fell to Nixon to take down the net and fire the umpires.

His successors, Democrat and Republican alike, would demonstrate the possibilities for money-printing, interest-rate suppression, public spending, and international payments imbalances in the absence of fixed exchange rates and a convertible dollar.

Nixon merely finished the monetary destruction work that others had started. In that sense, August15, 1971, was the coup de grace.

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Mr. Grant is the editor of Grant’s Interest Rate Observer.