Two bullies wid a bully fine song.
I know of only 2 sources that document the use/existence of this chantey. One is Cecil Sharp's book (1914), where he has taken down a version, with quite a different form, from the Englishman John Short of Watchet. Sharp collected three verses--not even verses really, just phrases. [Edit: more sources studied since this was first recorded, including the Carpenter Collection.]
Hugill is the other collector, who got it from Caribbean chanteyman Harry Lauder of St. Lucia. The presentation and wording of his text seem to imply that Hugill was not very familiar with the song, nor did he use it, but that he merely collected it (3 verses) from Lauder. He lists it as a halyard chantey.
Later on, Stan Hugill recorded "Bully in the Alley" with Stormalong John. Unfortunately, I've not heard that recording. I wonder what percentage of performers have. Actually, a recording of it was pioneered, I believe, by the group The Starboard List in 1977. Nowadays, it has ~really~ gone around. Unlike the documented versions, these performers repeat the lyrics of the first verse as if it were a refrain, throughout. I am a little bit put off just by the fact that all the popular versions are so alike; here's an effort to revert back to some of the traits in the original.
Because so few lyrics have been given in the sources, the typical practice has been to utilize couplets from "Sally Brown" -- of course, each performer's take on this will be different.
Please check out the whole chanteys project playlist, athttp://www.youtube.com/view...