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Smith was born in Norwich in 1759, the son of a wealthy wool merchant. He displayed a precocious interest in natural history and botany, studied medicine and botany at Edinburgh in 1781, and moved to London in 1783 to continue his studies. Smith was a friend of Sir Joseph Banks who was offered the entire collection of books, manuscripts and specimens of the Swedish natural historian and botanist Carolus Linnaeus. Banks declined the purchase but Smith bought the Linnean Collection for the bargain price of £1000. The Collection arrived in London in 1784 and in 1786 Smith was elected Fellow of the Royal Society.
Smith travelled the Grand Tour through the Netherlands, France, Italy and Switzerland visiting botanists, picture galleries and herbaria. He founded the Linnean Society of London in 1788 becoming its first President, a post he held until his death. He returned to live in Norwich in 1796 bringing with him the entire Linnean Collection. His library and botanical collections acquired European fame and were visited by numerous entomologists and botanists throughout the Continent. Smith spent the remaining thirty years of his life writing books and articles upon botany.