[Aktungbby]

Not quite correct(on a 'gaff' rigged boat as posts 106 &114 demonstrate) but still lookin' GOOD! http://www.usps.org/national/fecom/faq/flag/gaffpole.html

Many people are confused about the proper way to fly the national ensign from a gaff-rigged pole. As depicted in the drawing on the left, the national ensign should be flown from the gaff and the club or organization burgee should be flown at the masthead.
The usual argument given by those that think it is wrong to fly the national ensign from the gaff is that the national ensign is flying below a club burgee or other flag contrary to the Flag Code. Notice that even when the national ensign is flown from the stern of a ship, it is lower in height than other flags flying on the ship. When the ensign is flown from a gaff-rigged pole, a flag flown at the top of the mast is not considered above the ensign because it is not being flown directly above the ensign on the same halyard.
The ensign should be flown from the highest point of honor, and over time, that has become the peak of the gaff. Flying the national ensign from the top of the mast while flying another flag at the gaff would be flying another flag in a position of superior honor since the peak of the gaff is the highest point of honor.
The Palm Coast Yacht Club near St. Augustine, Florida had a continuing battle with a local veterans group which insisted the club was showing disrespect for the flag by flying it at the gaff of the club's flagstaff, a point physically lower than the club's burgee which is flown at the masthead. The matter was settled only after the club obtained a letter from the Secretary of the Navy confirming the fact that in the world of yacht clubs the highest physical point of a flagpole is not necessarily the place of honor.

As a former federal guard charged with raising and lowering the colors on official buildings with any number of patriotic onlookers watching my every move... ya get a little fussy and reported if that banner touches the ground! (A tough job for 1 man in a 20 knot wind with a garrison-sized flag!)