Former diplomat and author Richard Broinowski, in Under the Rainbow: The Life and Times of E. W. Cole (Miegunyah Press, MUP. $44.95), a sumptuous hardback book, not only provides a biography of Cole and his family, and the history of the Book Arcade, but also extrapolates from Cole's beliefs to comment on Victorian attitudes on race, religion, economics, politics and war.

Cole, born in Kent in 1832, the second-eldest of 16 children, left home at 16, eventually arriving in Victoria in 1852 in search of gold. Prospecting and various business ventures foundered and he ended up selling pies from a wheelbarrow in Melbourne's Eastern Market.

In 1865, at the age of 33, Cole found that he could make more money from selling second-hand books, which led to his opening the Bourke Street Book Arcade in 1873, before moving to the new building, with its famous rainbow sign, on Melbourne Cup day, 1883.

Cole's advertising proclaimed it to be "the finest sight in Melbourne and the grandest book shop in the world. Intellectual non-racing people are invited there instead of going to the races". So many people turned up that police were called to control the crowds.

Cole was a Victorian marketing genius, whom Amelia Mellor terms a mix of P.T. Barnum and Willie Wonka. The building, labelled "the first book Arcade opened in the world", had light filled galleries, open plan book shelving, with signs declaring, "Read For As Long As You Like - No One Asked To Buy". Cole even tolerated shoplifters, believing they would at least "be educated thieves". Education was a key, he believed, in overcoming societal inequality.

At the entrance, two mechanical sailors advertised items for sale, while inside customers could see a mechanical hen laying metal eggs. The Arcade soon "became a carnival" for visiting celebrities, such as Mark Twain and Rudyard Kipling. Above all, however, "it was one of the biggest and most splendid bookshops in the world".

In addition to the books, customers could visit Music Land to buy sheet music and hear a light orchestra and Wonder Land with its Funny Mirrors Room, Fairy Forest and World Beneath the Sea. Cole decried racism, especially towards the Chinese; in 1895, he established the Tea Salon, with multicultural staff serving Chinese and Indian teas on fine china.

Broinowski observes that Cole was "not only a bookseller but an autodidact, a writer and philosopher", whose essays extolling the commonality of all races, often put him at odds with the contemporary White Australia policy. Cole's credo was "Advance knowledge. Let prejudice perish, let justice and charity encircle the Earth and extend to the men of every creed". His appeal to "rational Christians of all denominations", also put him at odds with Melbourne's ecclesiastical establishments.

Cole's social and marketing prowess was amply demonstrated in the immense popularity of his Cole's Funny Picture Book, primarily aimed at children. First published in 1879, it was celebrated for its eclectic mixture of stories, poems, riddles, songs, homilies and descriptions of inventions, supplemented by numerous black-and-white illustrations on each page.

Cole unusually advertised in the Melbourne Herald for a wife in 1875, under the header, "Good Wife Wanted. Twenty Pounds Reward", which, surprisingly, worked out well. He and his Tasmanian wife Eliza had six children, all living "over the rainbow" in the flat at the top of the Arcade.

Amelia Mellor, in her debut YA novel, The Grandest Bookshop in the World (Affirm Press, $19.99), with its colourful rainbow cover, engagingly weaves a story around two of the Coles children, Vally and Pearl. In 1893, they find out that their father is in danger of losing everything through his dealings with the magically devious, "Obscurosmith". They must overcome seven riddles by midnight otherwise that will be the end of the Arcade and indeed the family.

Eliza died in 1911 and Edward in 1918, his death receiving wide press coverage, including in New Zealand and London. Broinowski notes that Cole's will gave "unassailable discretionary powers to trustees who were singularly ill-equipped to exercise them". "Corrosive management" within the Arcade Building then heightened losses, leading to closure in 1929 and a final closing down sale in 1931. Although, there were shops that carried on the name, they were a pale shadow of the Arcade's exuberant success.

Richard Broinowski and Annabelle Mellor, aiming at very different readerships, have superbly brought Edward Coles and the Book Arcade back to life. Broinowski concludes with the hope that his book "will provide an understanding of a man who inspired much affection and entertainment among those of his generation, so that his imprint on Australian society will endure".