[2] The party leader Thomas Waddell resigned and joined the Liberal Reform Party,[3] along with John Perry and 3 others, giving Liberal Reform a majority in the Legislative Assembly.

Campaigning for the 1907 state election involved personal allegations against Carruthers concerning his law firm representing William Willis in dubious transactions that were examined in the Royal Commission by Justice William Owen into the administration of the Lands Department.

[4] Carruthers fought back strongly with attacks on the Federal government tariff on wire netting and a program of reform appealing to the parties temperance supporters.

The election was held in September and saw Liberal Reform lose its recently gained majority, returning to 45 seats, with Labour and independents gaining seats from the collapse of the Progressive Party.

Carruthers was exhausted by the campaign and resigned as Premier at the end of September and was succeeded by Wade.