King Solomon's story is recorded in the Bible Old Testament book of First Kings. King Solomon was the son of King David and succeeded King David, bringing the twelve tribes into a united and strong nation during his reign. He ruled roughly 961-930 BCE.
King Solomon is mentioned in The Gift of the Magi because he accumulated great personal wealth and enlarged the treasury of the nation of Israel during his reign. Many foreign nations paid tribute to Israel following being conquered by his forces. The Queen of Sheba, also mentioned in the story, gave treasures from her homeland to King Solomon in recognition of the wisdom he demonstrated when she visited him. O Henry mentions King Solomon and the Queen of Sheba to emphasize that their tremendous riches were no more valuable than were Jim's watch and Della's hair.