Smith was one of many talented players who adhered to Hughes' doctrine. Now renamed the Red Demons (later to become simply the Demons), Melbourne went into the 1939 finals with a team based on all-out attack, with Smith the linchpin. In the Grand Final against Collingwood, Melbourne booted a record Grand Final score and set a new record winning margin, taking only their second premiership in 39 years. Another flag was won in 1940 when Smith was the star, scoring seven goals in the Grand Final. The following year, the team marked themselves as a special combination by completing the hattrick, despite missing players due to war service and injury on Grand Final day. Smith enjoyed his most productive season and finished the year as the VFL's leading goalkicker. He continued playing during the war years in a decimated Melbourne team. In 1944 Smith won "The Herald" newspaper's best player award. Smith was appointed captain of the club in 1945, leading the Demons to their first Grand Final defeat in 1946. Poor form and a loss of confidence led to Smith resigning the captaincy for 1948 and it seemed that, at 32, his career was winding down. Melbourne were thrashed by Essendon in the second semi final and were long odds to win the premiership. However, in something of a miracle, previously retired champion Jack Mueller was recalled to the team and in the next three games (which included a tied and replayed Grand Final) Smith and Mueller combined to dominate the scoring and lead the Demons to an unlikely premiership. Deciding that it was a perfect note on which to end his marathon career, 'Checker' Hughes retired as coach and Smith was a keen applicant for the position. Disappointingly for Smith, the committee decided (by a single vote) to award the job to ex-Melbourne premiership skipper, Allan LaFontaine. Anxious to begin coaching, Smith made an emotionally difficult decision to transfer to Fitzroy as captain-coach. His older brother Len was already there as coach of the Under 19's. Smith played only seventeen games with the 'Roys before retiring as a player in 1950. His time at Fitzroy was a mixed bag: the team was competitive without making the finals. Meanwhile, Melbourne were struggling and LaFontaine resigned after three years. So in 1952, Smith returned to Melbourne as coach. Benefiting from the recruitment of some of the best players in the club's history, Smith and Melbourne dominated the VFL for a decade, during which the club won six premierships: 1955-56-57, 1959–60 and 1964.