In 1933, Blaine, Washington issued round wooden coins when their bank failed. These were the first issues of wooden money in the U.S. Several other places, mostly in the Pacific North-West, issued wooden money after that. Some followed the flat format of Tenino and others used round pieces.
The Century of Progress in Chicago in 1933 was the first place to use wooden money pieces as souvenirs. Several issues were made - all round. Some are the size of a silver dollar and others are about three inches in diameter. In 1934 a new use for wooden nickels was found-a combination of advertising for civic celebrations and providing souvenirs of the celebration. Binghamton NY was one of first places to embrace this concept. Wood continued to be used to enhance civic celebrations such as centennials through the mid 1930’s and really started to be cranked out in 1938 when the J. R. Rogers Company of Fostoria, Ohio obtained a copyright on their design for wooden money. While the Rogers Company had competition and the competition also issued wooden money, woods produced for Rogers continue to be the most readily found.
Just when the adage "Don’t take any Wooden Nickels!" was added to the American language is unclear, but the reasons are easy to understand. First of all, each wood had an expiration date and generally even a specific final redemption time. If you were in a possession of a handful of wooden nickels that expired at noon today and your best customer came through the door at five minutes to noon, it would be difficult to get to centennial headquarters to cash them in. Many Wooden Nickels also said they had to be unbroken, and the rectangular "Flats" were pretty fragile.
So, a wooden nickel was something that didn't amount to much and had little practical value outside of the owners own sentimentality. My father in law is fond of saying, "Don't take any wooden nickels!"
I offer here my thoughts and limited insights; wooden nickels if you will. You can take one if you want!
*History of wooden nickel found at www.wooden-nickel.net/history