With Lang's leadership in doubt after a further election loss in 1938, Cahill abandoned his former praise of Lang, and he backed a caucus motion to support federal intervention in the state branch's factional infighting which had led to several of his colleagues defecting to the Industrial Labor Party, led by Bob Heffron, the member representing Botany in Sydney's south-east. Cahill subsequently supported William McKell, when he successfully challenged Lang for the Labor Party leadership in September 1939, and was elected to the party executive.