The 'peace' rhyme, of course, was written by Jean Ritchie (see Kytrad post above, 28 Aug 04).
As noted in her post of 29 Aug 04, the four lines given on the 28th are the earliest known, and they did not appear before the 20th c. (see threads linked at top of thread, esp. 1143: Rose ). Her explanation is the one generally accepted.

Dozens of people have added verses from other rhymes, or their own verses, since the first four lines appeared. Many search for a complicated explanation unsupported by fact. Childhood fantasies from summer camps and emotions and romanticized memories of those days probably are the source of these speculations.

The same is true of another 'scout-camp' song called 'Barges'. All the stories about it, too, are unsupported invention.