1894 as a spelling variant of bologna sausage (q.v.), representing the popular pronunciation. As slang for "nonsense," 1922, American English (popularized 1930s by Gov. Alfred E. Smith of New York; sometimes said to be one of the coinages of legendary "Variety" staffer Jack Conway), from earlier sense of "idiot" (by 1915), perhaps influenced by blarney, but usually regarded as being from the sausage, as a type traditionally made from odds and ends. It also was early 20c. ring slang for an inferior fighter.
The aristocratic Kid's first brawl for sugar was had in Sandusky, Odryo, with a boloney entitled Young Du Fresne. He gave the green and nervous Kid a proper pastin' for six rounds and the disgusted Dummy sold me his find for a hundred bucks, leavin' the clubhouse just in time to miss seein' the boy get stung, get mad, and win by a knockout. [H.C. Witwer, "The Leather Pushers," "Colliers," Oct. 16, 1920]