In the "Slang Dictionary (1874), 'squish' is marmalade. (Entry in Oxford English Dictionary)
"butter the loaves and spread the squish"--
I would guess that it would apply also to other spreads put on the buttered bread.

Thanks for contributing this. Haven't seen it before. Not in "Kiss Me Goodnight, Sergeant-Major." Can't find much on orderly duty or 'kitchen police.'

Lyr. Add. OUR JAM
(Tune- Marching through Georgia

The jam, the jam, the glorious gooseberry jam,
The jam, the jam, the jam that was made for me,
The jam we spread on somebody's bed
    or on half a loaf of bread,
The jam that feeds a hungry mob like we.

p. 59, F. T. Nettleingham, 2nd. Lt., 1917, "Tommy's Tunes," Erskine Macdonald Ltd.