Bonus rule

The Bonus Rule was a rule instituted by Major League Baseball in 1947 that prevented teams from assigning certain players to farm clubs. The rule stipulated that when a Major league team signed a player to a contract in excess of $4,000 ($42,900 today), the Major League team was required to keep that player on the 25-man roster for two full-seasons. Any team that failed to comply with the rule lost the rights to that player's contract. The player was then exposed to the waiver wire. If the player did remain with the team for a full two seasons, the team could then send that player down to the farm teams without repercussions. The rule went through several variations until it was finally abolished in 1965.

In the late 1930s and early 1940s, Major League franchises found themselves bidding against one another for the services of young players. These engagements subsided when World War II broke out. When the war ended, the bidding wars resumed.

This competition for the best amateur athletes resulted in skyrocketing signing bonuses. In 1947, Major League baseball implemented the Bonus Rule. The rule prevented the wealthiest teams from signing all of the best players and from stashing those players in their farm systems. Additionally, the bonus market was weakened as a result of inhibited competition. In return, this limited labor costs.

The legitimacy of the rule was challenged several times after it was initially implemented. In December 1950, the rule was rescinded. In 1952, a committee chaired by Branch Rickey revived the rule. It was this iteration of the rule that stated a team had to place the players who met the Bonus Rule criteria on the Major League roster immediately. Furthermore, the player had to remain on the roster for two calendar years from the signing date. Although the players were signed as a result of their potential, some players were not able to succeed. Pitcher Tom Qualters appeared in one game in the 1953 season. He did not appear in another game until 1957.

...
Wikipedia