Just did a quick search and got the below, don't know if it's true or not:

Rhyme & History

THE BIG SHIP SAILS ON THE ALLY-ALLY-OH

The big ship sails on the ally-ally-oh
The ally-ally-oh, the ally-ally-oh
Oh, the big ship sails on the ally-ally-oh
On the last day of September.

The captain said it will never, never do
Never, never do, never, never do
The captain said it will never, never do
On the last day of September.

The big ship sank to the bottom of the sea
The bottom of the sea, the bottom of the sea
The big ship sank to the bottom of the sea
On the last day of September.

We all dip our heads in the deep blue sea
The deep blue sea, the deep blue sea
We all dip our heads in the deep blue sea
On the last day of September.

The words of the Nursery Rhyme and children's song, 'The big ship sails... ' have been suggested by Kevin Dinnin. Little is known about the origins of the song, but we have speculated on possible origins

The big ship sails
Nursery Rhyme lyrics, origins and history

Nursery Rhyme Origins

The rhyme and song was often sang by children playing skipping games, the lyrics suited the ritual chants for children 'jumping in' the skipping ropes. Perhaps the term 'big ships' provide a clue to the origins.  The Manchester Ship canal was opened in 1894 and is the eighth-longest ship canal in the world, being only slightly shorter than the Panama Canal in Central America. The MSC was built for ocean-going ships - there were only six ships in the world too big to use the Ship Canal. These big ships started their journeys on the canal which led to the sea.  The Manchester Ship Canal connected Manchester, W England, with the Mersey estuary at Eastham, Birkenhead. Perhaps this is the origin of the song...

Info supplied by Kevin Dinnin