Hanging stockings by the fire to be filled with "stocking stuffers" is one of the oldest traditions associated with Saint Nick.
The story goes that an old nobleman lost his wife and shortly thereafter fell into complete poverty, leaving him unable to provide for his three young daughters. The family lost their home and was forced to live in a humble shack, so poor had they become.
When the time came for his daughters to marry, he had nothing to give them for their dowries. Without dowries they would never be able to find a husband and start families of their own, and for this the old man was heavy with sorrow.
So it happened that one night after the old man's daughters had washed their clothes, they hung their stockings by the fire to dry.
Saint Nicholas stopped by their shack that night, knowing of the despair of the old man. Seeing the girls' stockings hung by the fire, he slipped a pouch of gold in each one, thereby providing the dowry for each of the girls to be married and bringing great joy to the house.
And so, the tradition of receiving gifts in stockings by the fireplace was born!