Very briefly, then
.
Up until WWI, just about every country in the world maintained a gold/silver standard currency. What this means is that a) coins
were actually gold and silver, as opposed to the base metals used today, and b) for every paper dollar/pound/franc/whatever that a government issued, that same government kept the equivalent in gold or silver bullion in its treasury. In other words, paper money was literally an "I owe you" note, where the government promised to pay the holder of the note its equivalent in bullion. Sometimes, in extreme circumstances (e.g., the American Civil War), the government then decided to increase its money supply by printing "empty" money - i.e., issuing notes without having the gold to cover them. It thus generated debt, which it had to pay back after the crisis was over, and which (amazing!) it actually did pay back.
Note that this is an obvious, and natural way of doing things. That's the way it should be, if the government is giving you an "I owe you" note, there should be a possibility of trading that note in for actual money.