This looks like it might be a reference to a Gold Rush voyage to San Francisco in 1856. It is from LIFE BY LAND AND SEA, by Prentice Mulford, originally published in 1889. He is on board the "Wizard", and there is a lot of pumping going on. He says,

"For the first six weeks all the "shanty songs" known on the sea had been sung. Regularly at each pumping exercise we had "Santy Anna," "Bully in the Alley," "Miranda Lee," "Storm Along, John," and other operatic maritime gems, some of which might have a place in our modern operas of "The Pinafore" school. There's a good deal of rough melody when these airs are rolled out, by twenty or thirty strong lungs to the accompaniment of a windlass' clank and the wild, shrill sweep of the winds in the rigging above." (p. 24    Here:

http://books.google.com/books?id=ClgFQ2SwJQ0C&pg=PA24&dq=%22Bully+in+the+Alley%22&lr=&cd=12#v=onepage&q=%22Bully%20in%20the%20Al