They began, modestly enough as the New York Highlanders in 1903, owned by a couple of New York bartenders who laid out $18,000 to buy the Baltimore franchise and bring it north.
For their first eighteen years in New York, the Highlanders (they became the Yankees in 1912) seriously challenge for a pennant only once, in 1904 when star pitcher Jack Chesbro set a modern day record with forty-one victories, completing a staggering forty-eight games and posting an ERA of 1.82.
Some great players passed through New York in those years including Wee Willie Keeler, Hal Chase, Roger Peckinpaugh and Frank Baker, but the Yankees were always also-rans.
That all changed in 1920. The Yankees completed the famous deal to buy Babe Ruth from the Red Sox and also brought along some of Ruth's more talented teammates including third baseman Joe Dugan and pitchers Carl Mays, Waite Hoyt, Herb Pennock and Bullet Joe Bush.
With Ruth and a solid pitching staff as the seedlings, a dynasty sprouted. Yankee manager Miller Huggins guided the team to its first three pennants in 1921-22-23. They played the New York Giants in all three series, losing the first two; winning in 1923, the year they moved into Yankee Stadium.
In mid-decade, the team added a strapping young first baseman named Lou Gehrig to give the Yankees an unprecedented 1-2 punch, that along with supporting hitters Tony Lazzeri, Bob Meusel and Earle Combs, came to be known as "Murderer's Row." They won consecutive pennants again in 1926-27-28, winning the latter two World Series both in four game sweeps.
The 1927 team is considered by many baseball historians as the best team of all time, with Ruth hitting his Olympian sixty home runs (which was more than any American League team hit that season) and Gehrig hitting forty-seven. Gehrig had more runs batted in: one-hundred seventy-five to one-hundred sixty-four. Huggins died suddenly in 1929 and the Yanks were derailed for a few years, returning to the Series and sweeping the Cubs in 1932 under new manager Joe McCarthy. Ruth was gone two years later, but the Yankee machine would now enter an era of dominance rarely matched in the game before or since.
New York Yankees History