That's pretty much how every gold backed currency has ever worked though. The ability to redeem creates the trust needed to avoid the run on specie - it doesn't need to be fully backed as long as it is redeemable.
ok, so you're saying that the banks then always created notes for which they knew there was no gold?? a crime like that should be punishable by death if such a system came out and it was not fully backed, i'd be sure to go claim my gold at regular intervals...
I guess though that if you were going to go from an un backed currency to a fully backed currency, it would just require a rerating in that currency relevant to the amount of gold that country had at hand. For example if Australia had 2 Million ounces of Gold in the vault and they had 10 Trillion in currency in circulation(total) one ounce of gold would be effectively worth say $50,000 AUD. From that point on once fully backed the government would have to have an ounce of gold come into the vault before they could print another $50,000AUD. So you achieve the necessary outcome of increasing the money supply so there could be growth but in ounce relative terms and purchasing power terms the money supply holds it same value and the wealth of the nation as a whole could continue to grow without diluting the currency. Fractional Reserve Banking would have to cease at the time for it to work but it is achievable i think.
