Also known as "The Worms Crawl In," this delightful ditty is thought to have originated from the First World War or earlier. Certainly fragments of the lyrics predate the 20th Century, and although our ancestors lacked the technology that makes possible gory horror films like ...Dream Warriors, they certainly did not lack lurid imaginations.
Whether or not it is entirely or partly of American origin, it was popularized by the New England author Alvin Schwartz (1927-92), who included the lyrics of what might be called his version in Scary Stories To Tell In The Dark. This 1981 book was written for children, though many people - including those who run the American Library Association - did not consider it entirely suitable for young minds.
Suggestion credit: Alexander Baron - London, England