For 9 seasons between 1922-23 and 1937-38 the rags were in the 2nd division while City were in the 1st and won a League title and an FA Cup. They only escaped relegation to the 3rd division by the skin of their teeth on the last day in 1933-34 and of course during that period they were rescued for from imminent bankruptcy for a second time by their second sugar daddy James Gibson.
Before Gibson's arrival to bail them out financially they were so strapped for cash that they couldn't afford a new kit and played in such a tatty and threadbare kit their own fans nicknamed them the rags. Then City came along and, in one of many unreciprocated acts of kindness, bought them a new kit.