Why Rawhide Banjos Need a High Action
On modern banjos with tight synthetic heads the plane of the neck relative to the plane of the soundboard or diaphragm is the same. There is no sizable rake to the neck of the banjo. Because of this there is very little distance between the top of a bridge and the face of the banjo head. With modern steel strings this is of no consequence, since the physical amplitude or vibration of the string is extremely small.
With natural hide banjos and gut strings, this changes. Because the rawhide head or parchment relaxes when the humidity is high or temperature is low, a greater distance needs to be allowed for when setting up the height of the bridge and therefore the overall action of the strings. By raking the neck downwards at a small angle with relation to the plane of the banjo head, a much higher bridge can be used. As the head relaxes with humidity or temperature, and the bridge sags downwards the strings will remain high enough above the fret board to still be playable. Gut strings, being tuned to a much lower tension and being much more flexible than steel, vibrate with a much larger physical amplitude and you need more space between the strings and the fret board.
At a certain point however, the relaxation of the rawhide head may require the insertion of an even higher bridge to make up for the sag of the head and this was common practice among the minstrels of the 19th century. Where you set the action of your banjo is largely a subjective matter, but for the hammering motion of the stroke style, a higher action is usually desired. If you are only playing your banjo indoors and not subject to fluctuations in temperature or humidity, you can set up your instrument with a much lower action. If however, you play in environments of varying temperature and humidity, you'll definitely want a higher action and a spare higher bridge to accommodate the maximum possible range of head tension.
Even with adjustable tension rods, it is unlikely that you will be able to adjust the tension of your banjo head during a performance. With rawhide or parchment, it should also be remembered that if you tighten the head in a high humidity or low temperature environment, you had best back off the tension if the banjo is placed in a high temperature dry environment. Otherwise you may be dealing with a split hide or a damaged head. The more the skin or parchment ages, the greater this risk becomes.
Because of the nature of rawhide, you do not want to constantly be adjusting the tension anyway. Just like a fatigued piece of tin bent back and forth will break, so will a piece of rawhide. If you are going to adjust the rawhide, then you should dampen it first to make it flexible. The best course is just to leave head tension alone and let the natural environment provide the proper tension. Carry a higher bridge to accommodate the action if it relaxes too far and swap it out with a shorter bridge as the environment warms up or becomes dryer.