Four years later, in a treaty with Uruguay, the so-called "Argentine Formula" appeared.

To quote its language: "The contracting parties agree to submit to arbitration all questions of any nature which may arise between them, provided they do not affect provisions of the constitution of either state, and cannot be adjusted by direct negotiation." This Formula was soon put to the test in a serious dispute with Chile.
In the Treaty of 1881, in partitioning Patagonia, the crest of the Andes had been assumed to be the true continental watershed between the Atlantic and the Pacific and hence was made the boundary line between Argentina and Chile.

The entire Atlantic coast was to belong to Argentina, the Pacific coast to Chile; the island of Tierra del Fuego was to be divided between them.

At the same time the Strait of Magellan was declared a neutral waterway, open to the ships of all nations.

Ere long, however, it was ascertained that the crest of the Andes did not actually coincide with the continental divide.