Article below copied from Baseball Digest magazine:

The first conception of a designated hitter, a baseball player who would not take the field during the game, only bat for the pitcher’s position, was in 1906. The man to think up this crazy idea was Philadelphia A’s manager, Connie Mack. The proposal, obviously was shrugged off, but returned in 1928 when the National League agreed to use such a rule. It was never instituted though because the American League would not allow such a thing. Later, in the year 1940, California’s Bushrod Winter League, an amateur league became the first league to use the designated hitter. And in 1969, the International Baseball League used the rule for a brief period of one year before it was discarded.

The first official appearance of the designated hitter was during a 1973 Minnesota Twins spring training game, where Larry Hisle became the first player to appear at DH in a Major League lineup. The designated hitter would be used in every season, after 1972 in only American League home games. Why would the MLB adopt such a crazy rule that could kill the game of baseball? The reasons are simple, “to pump up the offense, give aging sluggers a chance to shine for a few more years, and to increase attendance.” Is there any doubt in ANYONE’S mind that the third reason was really the only factor; The owner’s didn’t care about aging sluggers, or more offense, and if they cared at all about those factors, it was because seeing an older Hank Aaron, or 15-14 games would, in effect, draw more people to the stadiums. To nobody’s surprise, all three of these “objectives” were accomplished: Total runs produced increased by nearly two-thousand, home runs increased by nearly four-hundred, and American League attendance rose roughly two million.

One of the strongest advocates for the designated hitter rule was Athletics owner, Charlie O. Finley who said, "The average fan comes to the park to see action, home runs. He doesn't come to see a one-, two-, three- or four-hit game. I can't think of anything more boring than to see a pitcher come up, when the average pitcher can't hit my grandmother. Let's have a permanent pinch-hitter for the pitcher." I fully disagree, along with many other baseball fans that a perfect game is boring. I think a pitcher pulling off a two-, three-, or four-hit game is an amazing feat…much more so than hitting a 320 homerun that squeaks over the right-field wall.

Regardless, the first designated hitter ever used in a regular season Major League game was in an opening day game between the Boston Red Sox and the New York Yankees. Ron Bloomberg, the Yankees’ sixth hitter came up with bases loaded against Sox hurler, Luis Tiant. Tiant, quickly made history by allowing the first DH RBI in history, by proceeding to walk Bloomberg and force in a run. The historic first home run was hit in the opening day game for the Twins by Tony Oliva.

Still, designated hitters are persecuted throughout the baseball community as being weak players who can’t really play the game of baseball. This is possibly the reason why so few natural designated hitters (players who played as DH all or nearly all of their career) are in the National Baseball Hall-Of-Fame. Most voters see the DH as a weak position, and thus, will only vote one into the hall of fame if his stats are astounding.