Green’s Dictionary of Slang

(US) wonderful, excellent, first-rate.

1905		F. Hutchison Philosophy of Johnny the Gent 7: [T]he other evenin’ he captures a derby filly somewhere an’ breezes her into a certain ice cream parlor down the street.
1914		T.A. Dorgan Indoor Sports 30 June [synd. cartoon] Didn’t know he was sick — That’s a darby!
1918		E. Hemingway letter c.1 June in Baker Sel. Letters (1981) 11: I crawled out over the top this afternoon and took some darby pictures of the Piave and Austrian trenches.
1933		Ersine Und. and Prison Sl.
1947		Argus (Melbourne) 15 Nov. 7s/1: I’m going to another dance [...] which will be darby, snazzy, groovy.