Originally posted by Pete Clark
I read a story about a woman who was a secretary. She got tired of typing errors (I'm not sure what they used to correct them in those days,) so she came up with the idea of painting over the letters. "Liquid Paper" was borne, along with a woman who quit her secretarial position. 
Here is some more trivia for you. That secretary Pete is refering to who invented Liquid Paper was Mike Nesbit's mother - Mike Nesbit of the Monkees musical/Television stardom.