A tiny footnote in Lyndon Johnson's biography made me realize I'd never asked why "blue sky" laws are called that?
Kansas enacted the first blue sky law in 1911 -- today, all 50 states have them to protect the public from securities fraud.
Apparently, traveling salesmen were going around peddling phony stocks in emerging industries (oil and gas, for example). Unassuming folk would buy them and lose their life savings.
Introducing Kansas's blue sky legislation, Kansas Banking Commissioner, Joseph Dolley, said that these phony stocks and bonds were secured by nothing more than “a piece of the Big Blue Kansas Sky."
Newspapers picked up the term, and a 1917 US Supreme Court case, Hall v. Geiger-Jones Co., which addressed the constitutionality of state securities laws, further consolidated the use of the term.
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