OED:
1769 W. Falconer Universal Dict. Marine (1780) , Rails..are
likewise nailed upon several planks along the side; one in
particular is called the sheer-rail, which limits the height of
the side from the forecastle to the quarter~deck, and runs aft to
the stern, and forward to the cat-head.
1846 A. Young Naut. Dict., Sheer-rails, a name for the mouldings
round a vessel's top sides.
From:
http://www.bruzelius.info/Nautica/Etymology/English/Repository%281788%29_p443.html
RAILS, narrow pieces of fir or oak with a moulding struck on them
and fastened to the ship's sides as ornaments, likewise in the head
and stern; their names are as follows: the lower rail on the side is
termed the waist rail, and the next above it the sheer rail, which
is generally placed well with the toptimber line, the rails next
above the sheer rail are termed drift rails, and the rail above the
plank sheer the fife rail, the rails of the head are known by lower,
middle and main or upper rails, and the rails of the stern are named
from the parts where they are fixed, as lower counter rail, upper
counter rail, &c.
This image has a red dot marking the sheer rail:
http://www.shipmodeling.ca/gs57.jpg
from:
http://www.shipmodeling.ca/aaglo-01.html#s
(Click on the names in white to see images.)
--
Peter Duncanson, UK
(in alt.usage.english)