Kansas Blue Sky Laws
The Progressive Movement in Kansas led to laws that regulated businesses and kept them from becoming monopolies in Kansas. Other laws provided security for people who bought stocks and bonds. These stocks and bonds were one way that people could use their money to make more money.
Kansas was the first state to enact “Blue Sky Laws” to protect investments. The state bank commissioner Joseph Norman Dolley encouraged states legislators to pass the bill, which they did in 1911. The law got its name when Progressives insisted that these investments in stocks and bonds be secured by more than “a piece of the Big Blue Kansas Sky.”
One Kansas law protected people who put their money into banks. This law added to a 1909 law that had set up a bank guaranty fund to be held by the state. This fund was a form of insurance to protect invested money. People felt safer depositing money in these protected banks.
The Kansas law served as a model for similar statutes in other states. Forty-seven states between 1911 and 1933 adopted “blue sky” statutes. It influenced a national change in two areas of business regulations. In 1933 federal legislation created the FDIC (Federal Deposit Insurance Corporation) that set up safeguards to protect people’s bank deposits. In 1956 the federal Uniform Securities Act was passed to protect people who bought stocks and bonds.
Entry: Kansas Blue Sky Laws
Author: Kansas Historical Society
Author information: The Kansas Historical Society is a state agency charged with actively safeguarding and sharing the state's history.
Date Created: April 2014
Date Modified: September 2015
The author of this article is solely responsible for its content.
