So you can write code like this:
void f( const string & s ) {
}
f( "foobar" );
Although strictly speaking what is actually happening here is not the literal being bound to a const reference – instead a temprary string object is created:
string( "foobar" );
and this nameless string is bound to the reference.
Note that it is actually quite unusual to create non-parameter reference variables as you are doing – the main purpose of references is to serve as function parameters and return values.