M, I've looked into that story.

The song hasn't been found (or even mentioned) in any form before 1917. The elaborate tin-pan alley song may or may not have been built upon an older chorus. Certainly the similarity of the lyrics to those of the older "All 'Round my Hat" suggests both derivation and some kind of 19th century existence - conceivably in the British army.

Confederate cavalry uniforms also featured the gold trouser stripe.

There's no real evidence one way or another as to why the ribbon should have been yellow (except for the vital fact that it scans better than "red," "blue," or "green") and no evidence either that the song antedates World War I.

The various colored stripes disappeared from everyday ("fatigue")uniforms when the U.S. Army and Marine Corps switched from blue to olive drab in 1902. Some army dress ("service") uniforms still retain the gold stripe. And they're still blue.