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The son of a horse-dealer, Caley was born in the north of England. He became interested in the herbs and this led to his teaching himself botany. In March 1795 he wrote to Sir Joseph Banks who, after warning him about the small monetary rewards to be expected by a botanist for his labour, suggested that he might be able to obtain work for him as a gardener's labourer, which would give opportunities of increasing his knowledge. A position at Kew Gardens was obtained, and he afterwards was given a free passage to Sydney, where he arrived in 1800. Banks gave him a salary as a botanical collector and he was allowed rations by the government. He was also given a cottage at Parramatta, and Governor King writing to Banks in September 1800 mentioned that it was intended to establish a botanical garden near it.

Caley sent many botanical and other specimens to Banks, and his letters also kept Banks informed of the general conditions of the colony apart from scientific matters. In 1801 he went with Lieutenant Grant to Western Port, and in 1804 he gave King a long report on "A journey to ascertain the Limits or Boundaries of Vaccary Forest" (the Cowpastures). He was able to report on the wild cattle which he found considerably increased in numbers.

On a later journey Caley ascended Mount Banks but did not attempt to explore the Blue Mountains proper. In October 1805 he visited Norfolk Island and went to Hobart at the end of November of the same year. In August 1808 Banks wrote to Caley offering him an annuity of £50 a year, and to release him from all services beyond what he voluntarily wished to perform. Caley returned to England in 1810 and some six years later was appointed curator of the botanic gardens, St Vincent, West Indies. He resigned this position in December 1822 and was back in England in the following May. He died on 23 May 1829. He had married in 1816 but his wife predeceased him without issue.

Both Banks and King found Caley difficult and at times tactless and unreasonable. He was, however, a good worker, a skilful and accurate botanist, and he was thoroughly honest and zealous. He published nothing, but his collections did much to spread a knowledge of Australian plants in the early years of the nineteenth century. [From Dictionary of Australian Biography]