Spokesman for an insulation contractors trade organization called on their fellow members to "take dead aim at the chiselers in our ranks."

According to Joe M. Baker Jr., executive vice president of the International Association of Wall and Ceiling Contractors/Gypsum Drywall Contractors International, the huge demand for insulation and government offers of tax credits have attracted "grab-the-buck-at-any-cost" types to the industry.

"The result has been obvious patches of tarnish on the industry's reputation," Baker added at a recent seminar of the organization here.

Several federal agencies have recently stepped up activities in attempts to regulate the skyrocketing industry. Officials of the Consumer Product Safety Commission have said that the problem is not in the insulation, if it is properly made, but rather with some inexperienced newcomers to the industry who are looking for shorcuts to produce large quantities of cellulose insulation without adequate preparation.

Baker warned his audience of a need to "re-legitimatize" the insulation industry in an effort to "give the buying public what it pays for a quantity job at a fair price."

Much of the problem caused by improperly manufactured cellulose insulation is expected to be alleviated next year, when several producers of rock wool and fiberglass insulation finish adding plant capacity. Shortages in those forms of insulation - considered by most to be superior to cellulose - have caused many people to turn to cellulose as an alternative.

Although housing starts have risen nearly 25 per cent over last year, the most marked increase in demand for home insulation has been in the area of retrofitting existing homes.

During the first nine months of 1976, and estimated 1.6 million homes were retrofitted with insulation. In the first nine months of 1977, that figure soared to 4.7 million homes.

"There will be periods of tight supply in the future," said Sheldon Cady, executive vice president of the National Mineral Wool Insulation Association to the same convention. "But we will be able to meet the supply demands over the longer term."