If you are doing the square with stitching down middle then cutting and you are having a problem with stretching, there is a push/pull issue involved. It can be you are doing it without realizing or your machine is doing it. If you, resolve it by only touching the fabric with your finger tips and see if that helps. If it is the machine, you are going to have to adjust some things. Grab some scrap cotton fabric and start sewing on the bias. Try using a walking foot to see if it evens out the feeddog movement. And you can always fuse a strip of interfacing to the seam line before stitching (1 " piece and then mark down the center). The good thing is that once you have figured out why it is happening, it won't ever happen again!!