The bonus rule was a instituted by Major League Baseball in 1947 to prevent teams from assigning certain players to farm teams. The rule stipulated that when a major league team signed a player to a contract with a signing bonus in excess of $4,000 , the team was required to keep that player on their 25-man active roster for two full seasons.
Any team that failed to comply with the rule lost the rights to that player's contract, and the player was then exposed to the waiver wire. Once a player remained with the team for two full seasons, he could be assigned to a farm team without repercussions. The rule went through several variations until it was finally abolished in 1965, when the Major League Baseball draft was initiated.