Why do you think gold is not used as money? If the market before chose it to be money? Any guess.
There can be no "guesses" about it. Currency backed up by gold (or any other asset limited in supply for that matter) had been a cause of much headache in the past due to its deflationary nature. The problems with gold backed money finally culminated in the Great Depression of 1929. After that the gold standard to which you appeal here had been quickly abandoned...
Your interpretation of the Great Depression is incorrect but lets not go into this.