He subsequently went on to support the Anglo-Irish Treaty, becoming a member of Cumann na nGaedheal when the party was founded.
McCarthy joined the government of W.
T.
Cosgrave as Parliamentary Secretary to the President (Chief Whip) in 1922, being the first person to hold that post.
He served in that post until 1924.
He resigned from the Dáil on 30 October 1924 and subsequently retired from politics.
He was President of the Gaelic Athletic Association from 1921 to 1924.