"My guess is that it was an old secular folktune adopted for religious purposes and taken to the US by the Moravians."

Jack, that's worth looking into.

As I see it, the issue surrounding the words is neither Carter's lyrical intention nor the finicalness of the "politically correct." The significant point is the quoted stanza's potential for mischief. By that I mean the aid and comfort it could give, however unintentionally, to antisemites, who - if they listen to the words in question - may nod their heads sagely and believe that Carter shared their bigotry.

If antisemitism were no longer a live issue, we could scoff at this. We, after all, know better. Unfortunately, the targets of antisemitism may well be made highly uncomfortable by the potential of those particular lyrics, especially when they're sung in a public venue.

It doesn't matter much what the author intended in a case like this, because the people doing the interpreting in either direction are unlikely to have heard assurances that Carter meant to single out the Pharisees only. Worse, while it was Pilate and Roman soldiers who ordered the stripping and ripping, the song doesn't mention the culpable Romans, just culpable "holy people." One fills in the blank according to one's knowledge or prejudices. Had Carter instead written something like "all the hypocrites," there'd be nothing to argue. Presumably he didn't think of it.