"Katie and the Jim Lee had a little race, Katie throwed water in the Jim Lee's face, (Oh babe)." The singer describes boats on the river and wishes he had a better life (or income, or woman, or whatever else seems worth complaining about)
Wheeler does not give an exact date for this race, but most of the boats involved were active around 1890. The "Katie" is probably the Kate Adams (second of that name), built in 1873. The Kate Adams set a record for the trip from Helena, Arkansas to Memphis, so it is reasonable to see her taking part in (and winning) a race.
The key verse about their race seems to float (though I've only seen it in Wheeler); her "Vicksburg Round the Bend" is a mish-mash: The first stanza is generic, with different cities being used; the second is standard blues, the third is found also in "What Does the Deep Sea Say," the fourth is from "Captain Jim Rees and the Katie," and the fifth is from this song. - RBW