why do they use metal, which is more valuable than paper, for small denominations and paper for larger denominations instead of the other way around?
Paper currency was first issued in the US by Massachusetts Bay Colony and later by the Continental Congress. Then as now, the notes were really promissory notes, that could represent money not actually on hand. The first paper currency issued by the US government was in 1861 during the Civil War when the US government was deeply in debt. I assume practicality also had something to do with it. When they started needing denominations larger than $20 worth of gold, it would have been difficult to continue using coins. For example, a $100 coin would have required 5 oz. of gold, too heavy to carry around.
