When you measure, you should NOT be measuring the seam. Cut 3 strips 1 1/2 inch x 3 1/2 inch. Sew the long sides together. Press the seams to the side. Now, from the right side, measure the center strip. It should measure 1 inch - from seam to seam on the FRONT. If it does not then you need to adjust your seam allowance (even if the seam itself measures EXACTLY 1/4 inch). In the end it really doesn't matter what the seam allowance is. The only thing that matters is the size of the piece after it is sewn.