In the early years of the Olympics the rules were made and enforced by the host country. It was assumed the host would be impartial. Unfortunately, during the 1908 Olympics bitter feelings developed between the Americans and their British hosts.
The feud probably began when England neglected to display the American flag among the others brightening the stadium, claiming they couldn’t find one. The Americans retaliated by refusing to dip their colors in tribute as they paraded by King Edward. “This flag dips to no earthly king,” said discus thrower Martin Sheridan. The Swedish flag too was not displayed. Later Sweden withdrew from the competition after a disagreement with the British rules-makers over a wrestling event.
There was much bickering between the English and Americans throughout the games. Things came to a head in the 400-meter run. Among the runners were three Americans: J.C. Carpenter, J.B. Taylor, and W.C. Robbins. The English entry who had a good chance to win was Wyndham Halswelle.
In the final 100 meters Carpenter, Robbins and Hallswelle were grouped together. Carpenter and Robbins were on the inside. Then at the last turn, Carpenter cut in front of Hallswelle, taking the lead. Instantly the British officials began to shout, “Foul! Foul!” They claimed that Carpenter–deliberately, according to their view–had interfered with Halswelle. One of the judges ran onto the track to stop Taylor, the other American. Another judge cut the tape before the race was over. The order of finish was Carpenter first, Robbins second, and Halswelle third.
After some deliberation the British judges ruled that the race was void. Carpenter was disqualified for a foul. The other three–Taylor, Robbins, and Halswelle–would have to run the race over again.
Carpenter protested that he had done nothing wrong. He always pulled out wide during a race. Halswelle could have passed on either side of him if he’d had the speed and stamina left to do so. “We just raced him off his feet,” Carpenter declared. “He couldn’t stand the pace.”
American officials also protested, but the British refused to change their ruling. Fuming, the Americans withdrew Robbins and Taylor from the rerun.
Two days later Wyndham Halswelle was the only entry in the 400-meter run. He had the track all to himself as he ran the distance in 50 seconds. Mostly because of that controversy, from then on international judges supervised Olympic events instead of the host country.
From The Giant Book of More Strange But True Sports Stories by Howard Liss. Illustrations by Joe Mathieu.
https://en.wikipedia.org/wiki/Athletics_at_the_1908_Summer_Olympics_%E2%80%93_Men%27s_400_metres
There seems to be some disagreement as to whether the US team pulled the other runners from the 2nd race, or whether the runners themselves withdrew. However, the root of the argument seems to be that Carpenter’s move was allowed under the rules which he was used to racing in the US, which was clearly another argument in favor of setting standardized rules for international competition.