In addition to compiling the Folkways anthology, Smith was also instrumental in getting Folkways to produce "The Fugs First Album", now considered the first "folk rock" album, on its Broadside label in 1965. A regular visitor to the Peace Eye bookstore, in Manhattan's East Village on 10th Street between Avenues B and Ave C, founded in 1965 by poet Ed Sanders, Smith had advised Sanders which books about Native American studies the store ought to stock. When Sanders and Tuli Kupferberg formed the Fugs, they rehearsed at Peace Eye. "Thanks to Harry," writes Sanders, "the band was able to record an album within weeks of forming." Peter Stampfel recalled that, as the album's editor and producer, "Harry's contribution to the proceedings were his presence, inspiration, and best of all, smashing a wine bottle against the wall while we were recording 'Nothing,'" But Sanders recalled learning a lot from watching Smith's adept, businesslike tape editing at the Folkways studio, adding that, as far as he knew, Smith received no financial reward for his work. He asked for a bottle of rum, which Sanders bought for him, and then proceeded to smash the bottle against the wall, to "spur us to greater motivity and energy", Sanders speculated.