Pressed paper because it made a "noiseless" chip. Allowed for more discreet games at home and elsewhere. Also cheap... these were popular during the depression and war years. I remember seeing these in drug stores and stationery stores in the 1940's. Montgomery Ward, Macys, and Dennison (label maker) had their own brand names on the boxes, for example. Usually sold for less than a dollar a box.

Although Seymour says the are of little interest to collectors, I like to have them all, and it's a challenge to get nice examples of some of the scarcer designs like pirate and rooster. The painted surface would wear off pretty fast when played, and spilling a drink on a paper chip turned it soggy [g].