It's pretty simple, actually.
The center of gravity for that entire rig is directly below the end of the ruler as it's on the shelf.

Looking at it, it's obvious that the head of the hammer is the heaviest bit. The moment created by the head of the hammer pulling downward due to gravity is substantial- so it's closer to the pivot point, which is the end of the ruler on the edge of the shelf. The combined moment of the handle, the ruler and the string, applied farther out, balance the moment of the head. If you look at it from the standpoint of M-rxF it's pretty intuitively obvious.

Then again, I took Statics in engineering school...
( The Resident Loon Not a demographic. Do not measure., Tue 8 Jul 2008, 16:53, Reply)