The controversy centered on the National Challenge Cup, but was really about the question of who controlled soccer in the United States, the team owners or the federation bureaucrats.
[1] Three teams decided to defy the league and enter the cup: Bethlehem Steel, Newark Skeeters and New York Giants.
The USFA responded by suspending the ASL, making it an outlaw league according to FIFA rules.
Other, European, players returned to Europe in order to retain their FIFA standing.
[4] The collapse of the stock market in October 1929 led to the onset of the Great Depression which exacerbated the financial problems and gave the two leagues and USFA the motivation to find a solution to the conflict.