As a custom, the flag is lowered daily at the last note of retreat. Special care should be taken that no part of the flag touches the ground. The Flag is then carefully folded into the shape of a tri-cornered hat, emblematic of the hats worn by colonial soldiers during the war for Independence. In the folding, the red and white stripes are finally wrapped into the blue, as the light of day vanishes into the darkness of night.
This custom of special folding is reserved for the United States Flag alone.
How to fold the Flag
To properly fold the Flag, begin by holding it waist-high with another person so that its surface is parallel to the ground.
Fold the lower half of the stripe section lengthwise over the field of stars, holding the bottom and top edges securely.
Fold the flag again lengthwise with the blue field on the outside.
Make a triangular fold by bringing the striped corner of the folded edge to meet the open (top) edge of the flag.
Turn the outer (end) point inward, parallel to the open edge, to form a second triangle.
The triangular folding is continued until the entire length of the flag is folded in this manner.
When the flag is completely folded, only a triangular blue field of stars should be visible.
Flag Folding Ceremony
The flag folding ceremony described by the Uniformed Services is a dramatic and uplifting way to honor the flag on special days, like Memorial Day or Veterans Day, and is sometimes used at retirement ceremonies.
Here is a typical sequence of the reading:
(Begin reading as Honor Guard or Flag Detail is coming forward).
The flag folding ceremony represents the same religious principles on which our country was originally founded. The portion of the flag denoting honor is the canton of blue containing the stars representing the states our veterans served in uniform. The canton field of blue dresses from left to right and is inverted when draped as a pall on a casket of a veteran who has served our country in uniform.
In the Armed Forces of the United States, at the ceremony of retreat the flag is lowered, folded in a triangle fold and kept under watch throughout the night as a tribute to our nation's honored dead. The next morning it is brought out and, at the ceremony of reveille, run aloft as a symbol of our belief in the resurrection of the body.
(Wait for the Honor Guard or Flag Detail to unravel and fold the flag into a quarter fold--resume reading when Honor Guard is standing ready.)
The first fold of our flag is a symbol of life.
The second fold is a symbol of our belief in the eternal life.
The third fold is made in honor and remembrance of the veteran departing our ranks who gave a portion of life for the defense of our country to attain a peace throughout the world.
The fourth fold represents our weaker nature, for as American citizens trusting in God, it is to Him we turn in times of peace as well as in times of war for His divine guidance.
The fifth fold is a tribute to our country, for in the words of Stephen Decatur, "Our country, in dealing with other countries, may she always be right; but it is still our country, right or wrong."
The sixth fold is for where our hearts lie. It is with our heart that we pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all.
The seventh fold is a tribute to our Armed Forces, for it is through the Armed Forces that we protect our country and our flag against all her enemies, whether they be found within or without the boundaries of our republic.
The eighth fold is a tribute to the one who entered in to the valley of the shadow of death, that we might see the light of day, and to honor mother, for whom it flies on mother's day.
The ninth fold is a tribute to womanhood; for it has been through their faith, love, loyalty and devotion that the character of the men and women who have made this country great have been molded.
The tenth fold is a tribute to father, for he, too, has given his sons and daughters for the defense of our country since they were first born.
The eleventh fold, in the eyes of a Hebrew citizen, represents the lower portion of the seal of King David and King Solomon, and glorifies, in their eyes, the God of Abraham, Isaac, and Jacob.
The twelfth fold, in the eyes of a Christian citizen, represents an emblem of eternity and glorifies, in their eyes, God the Father, the Son, and Holy Ghost.
When the flag is completely folded, the stars are uppermost, reminding us of our national motto, "In God we Trust."
(Wait for the Honor Guard or Flag Detail to inspect the flag--after the inspection, resume reading.)
After the flag is completely folded and tucked in, it takes on the appearance of a cocked hat, ever reminding us of the soldiers who served under General George Washington and the sailors and marines who served under Captain John Paul Jones who were followed by their comrades and shipmates in the Armed Forces of the United States, preserving for us the rights, privileges, and freedoms we enjoy today.
This information was retrieved from Chamber of Commerce