On September 13, 1943, Decree-Law No. 5,812 created five federal territories in a single stroke: Amapá, Rio Branco, Guaporé, Iguaçu, and Ponta Porã. Vargas called the policy the Marcha para o Oeste — the March to the West — and the logic behind it was equal parts development scheme and defensive reflex. Border regions far from any state capital would instead answer directly to Rio de Janeiro, staffed by federal appointees, funded by federal money, and watched by federal eyes. Ponta Porã's share came out of the south of Mato Grosso: seven municipalities detached and reassembled into a new administrative unit. Bela Vista, Dourados, Maracaju, Miranda, Nioaque, Ponta Porã, and Porto Murtinho. All of them were border towns. Some sat at the literal outer edge of Brazil's political-administrative reach, in the country between the Paraná and the Paraguay, two rivers that carried most of what moved through the region.

Ponta Porã does not have a border so much as a street. The line with Paraguay runs dry here — no river, no gorge, nothing but an avenue with Brazil on one curb and Pedro Juan Caballero on the other. Today the two cities form a single conurbation of more than 215,000 people sharing some eleven kilometers of open frontier. Paraguay had been thinking along the same lines as Brazil: it created its own Territory of Amambay with Pedro Juan Caballero as capital, two governments mirroring each other across a painted line. Neither was writing on blank paper. Since the 1890s the yerba mate concession of Thomaz Larangeira — the Companhia Matte Larangeira — had organized labor, transport, and commerce on both sides of the boundary. When Vargas installed a territorial administration here, he was inserting the federal state into a border economy that had been running itself for fifty years.

The seat of government moved, and then moved back. Ponta Porã held it for the first eight months and the last six — fourteen months in total. Maracaju held it for twenty-five. The reason was a railway station, inaugurated at Maracaju in April 1944, which suddenly made the town the fastest link to Campo Grande and, through it, to Rio de Janeiro. Not everyone was persuaded. One contemporary critic demanded to know why the capital had been pulled out of Ponta Porã at all, why not Campo Grande, why not Nioaque with its roads still marked by the retreat from Laguna — and why, finally, Maracaju, dismissed as "an artificial city that will lose its expression when the road extends into the Paraguayan hinterland." The move blindsided Ponta Porã's residents, its legislators, and even the governor, who had supported the idea before opposing it. Decree-Law No. 9,380, signed June 18, 1946, sent the capital back.

Colonel Ramiro Noronha was named the territory's first governor early in 1944 and did not begin governing until October — nine months of a new administrative unit waiting for its administrator. He resigned in November 1945, swept out with Vargas himself when the president was deposed. Leônidas Horta, who ran the Education and Culture Division, held the post temporarily. Major José Guiomard dos Santos was appointed next and lasted two months before being sent to govern the Territory of Acre instead. That left José Alves de Albuquerque, a physician attached to the Boundary Commission, who kept the office until September 1946. A doctor from the survey teams that walked the frontier line ended up being the last person to govern it.

The 1946 Constitution, promulgated on September 18, dissolved Ponta Porã and Iguaçu and returned their municipalities to the states they had been taken from. The three northern territories survived: Guaporé became Rondônia, Rio Branco became Roraima, Amapá kept its name, and all three eventually became states in their own right. Ponta Porã's seven towns went back to Mato Grosso and stayed there until 1977, when the south of that enormous state was split off as Mato Grosso do Sul. All seven sit inside it now. The experiment left almost nothing behind that a visitor could point to — no capitol, no monument, no boundary marker. What it left instead is a question the border still poses every day, on an avenue where two countries share a sidewalk: who, exactly, governs a place like this?