The only context in the song is "long, long ago" - I'm assuming early 1900s or Victorian Era? When did scary stories become a part of the Christmas celebration - how - and when did it die out? Furthermore, is "A Christmas Carol" a reflection of this, or just a standalone story?
I think that's more of an English as opposed to American tradition. See 'Christmas ghost stories.'
What version of this song have you seen that has those lyrics?