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IBM gross income reaches $31 million and net earnings are $8 million. A five percent stock dividend is declared. There are over 10,000 IBM employees (10,834) for the first time.

The IBM Type 805 International Test Scoring Machine is introduced, giving rise to the familiar "fill-in-the-bubble" test score sheets. The test-scorer, primarily designed by Reynold Johnson (who would later be a key figure in the development of magnetic disk storage), uses the conductivity of pencil marks to sense correct and incorrect answers.

The IBM 077 Collator and the Alphabetical Interpreter are introduced.
IBM announces a policy of paying employees for six annual holidays and becomes one of the first U.S. companies to grant holiday pay. Paid vacations also begin.