Reading through after googling "riding down to Bangor" I was pleased to read comments and updating by all, but especially interested in Guest, David Silvers comments about thinking it was about a Bangor somewhere in the UK.
I also used to sing it at school in the east end of London in the late 1940s. Although our orientation was guided by the second line as we sang it, which read as "in the straits of Maine" therefore placing it in the States.
I spent the next 40 years thinking that maybe the inhabitants of the U.S. were a little more liberated than us.
I must say that on my first visit, I was disappointed to find no American that had heard the song. You have restored my faith and stilled my doubts that I was imagining it all.
Lastly, might I add that we used to sing it to a "Galloping polkery style"