Reference > Brewer’s Dictionary > Smart Money.

E. Cobham Brewer 1810–1897. Dictionary of Phrase and Fable. 1898.
Smart Money.
Money paid by a person to obtain exemption from some disagreeable office or duty; in law it means a heavy fine; and in recompense it means money given to soldiers or sailors for injuries received in the service. It either makes the person “smart,” i.e. suffer, or else the person who receives it is paid for smarting.   1



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