Let’s make this a bit more concrete. Suppose there was a law that stated that pancakes could only be sold if they were cooked with butter, and that the resulting mixture must be whipped with a blender at 300 rpm. An inspector comes to your restaurant, and finds that you are cooking with oil, and whipping the mix by hand.

So you whip out your well-thumbed copy of Joy of Cooking and explain to the inspector, “But see, I can substitute oil.” Your inspector may be a bit perplexed at this. But I’m not sure he should be. Yes, Joy of Cooking allows you to use oil for butter; they are valid substitutes that have similar properties and achieve similar results. No one, however, would could reasonably claim that a pancake cooked with oil is actually cooked with butter, as the regulation demands. You should probably be fined.

The government, however, effectively argues that butter and oil are, in fact, the same thing. It claims that when Congress authorized the federal government (in section 1321) to set up “such exchange,” it was effectively making a section 1321 exchange and section 1311 exchange substitutes. In other words, if you establish an exchange under section 1321, you’re really establishing one under section 1311. Hence, Cohn’s substitution argument.