This is a traditional chantey as well as a tavern song. Earliest date for this song is recorded as 1841. Each verse is another unpleasant answer to the question, "What do you do with a drunken sailor?" and this is often used as the title. Some of these solutions would be fatal.
Additional verses:
Throw him overboard and drag him on the anchor

Tie him to the topsail while she's yardarm under

Feed him to the sharks til the bones is floatin'

Hang him from the mast as a Jolly Roger

Give him a dose of salt 'n' water

Give him a taste of the Bosun's rope-end

Put him in a dress and throw 'im to 'is shipmates

Here are some additional, modern additions:
Sever his dinghy, make a mini-series

Make him the captain of an Exxon tanker

Put him out to pee in the poison ivy

When I heard this song performed at the Texas Renaissance Festival in 1998, it was sung by a group of which I don't remember the name, and the verses they sang have stuck in my head ever since (following the pattern described in the original write-up):

What do you do with a drunken sailor?

Lock him in a room with the captain's daughter.

You ain't seen the captain's daughter!

Looks just like an orangutan

There she goes, swinging on the rigging.

Give him a hair of the dog that bit him.

You ain't seen the dog that bit him!

Take a look at the captain's daughter!

Some additional things to do with a drunken sailor:

On a side note, captain's daughter was slang for the Cat o'nine tails.

Oolong tells me that this can be sung in harmony with Oh, sinner man and Roll the old chariot.

When I was young and foolish, I devised a version of this song suitable for hiking.

What do we do with a stupid hiker?

1. Make him look for buried treasure

2. Tell him we're near the Dutchman's Mine

3. Make him carry all the water

4. Tell him you see grizzly bears

5. Make him look for the little black dog


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