Green’s Dictionary of Slang

anything physically energetic, a party; a fight, a battle.

1912		Conan Doyle Lost World 66: ’If the medical students turn out there will be no end of a rag. I don’t want to get into a bear-garden’.
1915		‘Bartimeus’ ‘The Seven-Bell Boat’ in A Tall Ship 77: That’s all been the luck of the battle-cruisers and destroyers. They’ve had a topping rag—three of our term have been wounded already. [Ibid.] 83: It must have been an awful good rag.
1915		G. De S. Wentworth-James Purple Passion 39: I’m having the ’rag’ at my place this time – ’The Wasp’ and I are giving it together – so you come along.
1934		B. Traven Death Ship 355: ‘What’s the rag’ I asked. ‘You can’t do anything about this heavy sea coming up.’.
1936		D. Burley in Chicago Defender 5 Dec 14: They called dances ‘sciffles’ or ‘rags’.