In Canoecraft Ted tells you to trim the ends of the planking flush with the inner stem as you go to provide a flat surface for the outer stem. If this is continued all the way up, the width of the flat spot will eventually exceed the width of the outer stem. Not good. You need to switch your method just before the flat spot becomes too wide. This post describes the problems that ensue: viewtopic.php?f=1&t=378
My understanding* is that the 1/8" edge is still there, just covered. You need it later as a reference for how deep to make the outer stem mortice. viewtopic.php?f=1&t=4276Is there a hard rule to know when the strips should start going all the way to meet each other at the bottom of the stem instead of leaving this 1/8" leading edge of the stem?
* You should bear in mind that I'm strictly an armchair canoe builder who has shamelessy absorbed most of his knowledge from other members of this forum :)