A native of Worcester, Massachusetts, Daley graduated from high school in 1901 and obtained an appointment to the United States Military Academy (West Point) as a member of the class of 1906.

His high graduation rank (fifth of 78) enabled him to obtain the assignment to the Corps of Engineers, and his early postings included Fort Mason, California and duty in the Philippines.

Post-war assignments included the Harbord Commission in Turkey and Armenia, the Allied High Mission to Armenia, executive with the American Relief Administration that took part in relieving the Russian famine of 1921–1922, and deputy commissioner in Greece for the American Red Cross mission that implemented the Treaty of Lausanne to end the Greco-Turkish War of 1919 to 1922.

Daley was promoted to brigadier general after his graduation from the United States Army War College, and his senior assignments included command of Puerto Rican Department and V Corps.

[2] After his high school graduation, Daley competed for a congressional appointment to the United States Military Academy at West Point.

[3] Among his classmates who also became general officers were Jonathan M. Wainwright, Adna R. Chaffee Jr., Frank Maxwell Andrews, and Cortlandt Parker.

[6] At the start of World War I, Daley was assigned to Vancouver Barracks as senior instructor at the first Officers' Training Camp for engineers, and he served from June to August 1917.

[6] In August 1917, he received promotion to temporary lieutenant colonel and was assigned to the 310th Engineer Regiment during its organization and training at Camp Custer, Michigan.

[6] Following the armistice, Daley took part in the Occupation of the Rhineland, then performed engineering duties at locations in France including the Le Mans Embarkation Area.

[7] From October 1919 to June 1920, he was a member of the Allied High Mission to Armenia, and served as military governor of the provinces of Nakhchivan and Sharur.

[7] From January to July 1923, Daley was deputy commissioner in Greece for the American Red Cross during implementation of the Treaty of Lausanne that resolved the Greco-Turkish War of 1919 to 1922.

[9] He was slated to command United States Army Forces in Northern Ireland, but the assignment was subsequently withdrawn by Army Chief of Staff George C. Marshall, who indicated he had received several reports indicating Daley's leadership style was not conducive to exercising high-level command, and insinuated a troubling personal failing, possibly alcoholism.

With remarkable skill he directed the laying out of the defense scheme of the positions taken in the Meuse-Argonne offensive, rendering services of inestimable value to the American Expeditionary Forces.

95 (1919)[13] In the Bois de Fays, from Oct. 14 to Oct. 26, 1918, Colonel Daley, under continuous harassing fire during which losses were considerable, by his example of endurance, cheerfulness and high courage, was a constant source of inspiration for both officers and men of his command.