According to From Flappers to Rappers: A Study of American Youth Slang by Dr. Thomas Dalzell, "the berries" was a 1920s widely used slang term among American youth to describe something wonderful or very good. I shouldn't be surprised if etymology reveals "the berries" to be much older than the 1920s; however, what I'm most curious to know is why anyone would describe something wonderful or very good as "the berries". Any thoughts?
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I don't know that Dr. Thomas Dalzell and I would have the same definition of "widely used slang", but I more than suspect this use of the berries originated in an 1869 Punch cartoon...
I see The New York Times reproduced that cartoon in 1911 (search for "berries" on that page, and it's in the OCR text). The (comparatively few) written instances I've been able to find suggest the term was mainly associated with wealthy young people (whose parents probably read NYT). In Proceedings of the Royal Society of Medicine, 1924, the use of "scare quotes" suggests to me that particular doctor expected at least some of his upper-middle-class readership to appreciate the reference (i.e. - it may have been something of "catch-phrase" for a certain class of people).
It seems to me if there's any meaning at all to the search for an "origin" of such a short-lived and geographically/socially constrained usage, it's more likely to have arrived via the Punch -> NYT route than from a more "earthy" allusion to testicles.
EDIT: Prompted by @JEL's comment below, I just found in the full OED this definition 1c...
But I note their first two citations are 1918 for the precise meaning a berry = a dollar and 1920 for the more figurative berries = something excellent. So I think my "folk etymology" stands scrutiny - particularly bearing in mind that my 1924 cite above specifically refers to the mistletoe berries.
Also note that OED has the usage bean = [a bit of] money from 1811, leading to this 1915 cite where three thousand beans = three thousand dollars. I think it's reasonable to suppose a degree of berry/bean conflation occurred within "high society" during the pre-war years. So regardless of any possible "first use" citations, the usage OP asks about probably owes at least some of whatever currency it ever had to association with other such semantically-related figurative usages.
During summer holidays , teenagers would be employed to pick strawberries and raspberries in Perthshire . They would arrive in buses from outlying areas. It gave opportunities to mix, and generally have fun . Memories would be of long summer days , and often their first pay packets . With this in mind , something good would be referred to as the berries .
I can claim a first person familiarity with the usage. My paternal grandmother, born Dundee 1895, emigrated to US via Canada, 1911, used to use it all the time as a part of her normal speech. I asked her why once and she gave the berries explanation, whether mistletoe or others, not the testicles one. Whether she picked it up as a child in Scotland or after arriving here, I cannot say.
J.E. Lighter, Random House Dictionary of Historical Slang (1994) reports that the expression from which "the berries" arose was "all to the berries":
The McGaffney quote, in greater context, appears in Kenneth McGaffney, The Sorrows of a Show Girl: A Story of the Great "White Way" (1908):
An example of "the berries" by itself meaning "the height of excellence" is this item from the Chicago Daily Tribune, reported in Library of Congress, Catalogue of Copyright Entries (1921):
Interestingly, Lighter also reports that by the early 1940s, "the berries" had also evolved (by way of ironic usage) very nearly the opposite meaning in some settings:
Further complicating the picture are two other meanings (also reported in Lighter) with usage examples from the 1920s:
The expression didn't vanish at the end of the 1920s. Max Décharné, Straight from the Fridge, Dad: A Dictionary of Hipster Slang (2004) cites this example from Peter Cheyney, Your Deal, My Lovely (1941):
As to what the original idea of "berries" was in the phrase "all to the berries," one possibility is "money." Lighter gives "a dollar; pl. money" as one definition of berry, with a first cited occurrence from 1916.