Famous toymaker Richard T. James was working as an engineer in a naval shipyard during World War II when a spring fell off of a table and began wandering off, the way Slinkies are prone to do. He was inspired to make this a toy, so after tweaking the basic design of the spring he figured out the right size and weight that would allow the spring to walk down a flight of stairs. He released his finished product in 1945, and history was made.
The Slinky was initially a smash hit, but business slowed down in the 1950s. Sales were down, his company was going bankrupt and James started giving away what money he had to a religious group that his wife Betty dubbed "a cult". He ran off with his religious group to Bolivia in 1960 and was never seen again. Betty kept the company out of bankruptcy, running the show until 1998, when she sold it toPoof Products Inc. According to the Straight Dope, buying a Slinky will not result in your money funding a cult, so don't worry.
For more Slinky facts, check out the article we wrote about them last year.