The term “snake oil” is frequently used to describe any substance that has no real value but sold as a remedy for a particular set of problems. By extension, a snake oil salesman is someone who knowingly sells fraudulent goods or who is himself or herself a fraud, quack, charlatan, and the like. But where did the term come from?
Snake oil was a real product—a traditional Chinese medicine that was brought to the United States in the 1800s by thousands of Chinese migrants who came to the country in order to find work building the Transcontinental Railroad. They brought with them their families, their culture, and their medicines. One of these was snake oil, extracted from Chinese water snake, and used to treat arthritis and joint pain.
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Source: amusingplanet.com