The tale is often repeated that portrait painters used to charge more for larger paintings and that a head and shoulders painting was the cheapest option, followed in price by one which included arms and finally the top of the range 'legs and all' portrait. Actually, that's not a fact. There's no evidence to suggest painters charged by limb count.
The phrase, 'An arm and a leg,' is much more recent then that. The earliest citation found is from The Long Beach Independent, December 1949:
A more likely explanation is that the expression derived from two earlier phrases: 'I would give my right arm for...' and '[Even] if it takes a leg', which were both coined in the 19th century. The earliest example found of the former in print is from an 1849 edition of Sharpe's London Journal:Food Editor Beulah Karney has more than 10 ideas for the homemaker who wants to say "Merry Christmas" and not have it cost her an arm and a leg.
Others have suggested it derives naturally from a 19th century expression "if it takes a leg" and the other earlier expression "I'd give my right arm."He felt as if he could gladly give his right arm to be cut off if it would make him, at once, old enough to go and earn money instead of Lizzy.
Following is a humorous source of this phrase which I can't authenticate:
Adam told god he was lonely, so god said I will create a perfect companion for you who will always look after you, do all the house work, cook all the food, carry your children, look after you when you are sick, love and cherish you always. When you have an argument your companion will always be the first to say sorry because you were right.
That sounds to good to be true said Adam, how much will this cost me god.
And god said an arm and a leg.
so Adam said what can I get for a rib?
And the rest is History.