I bought this single when it came out (Smiling Phases was the 'B' side). This song was written and sung by Dave Mason, rather than Steve Winwood who did most of the singing for the band. Interestingly, Dave said it was the first song he wrote and that it was like a nursery rhyme. He said he had not tried LSD at the time he wrote the song (many thought it was influenced by that drug). Francine Heimann was the six year old girl who did the spoken part in the middle of the song. She was the stepdaughter of Island Records boss Chris Blackwell.
Winwood had success as a musician prior to joining Traffic, becoming the frontman of the Spencer Davis Group at age 15 in 1963. Winwood met drummer Jim Capaldi, guitarist Dave Mason, and multi-instrumentalist Chris Wood when they jammed together at The Elbow Room, a club in Aston, Birmingham. After Winwood left the Spencer Davis Group in April 1967, the quartet formed Traffic. Soon thereafter, they rented a cottage near the rural village of Aston Tirrold, Berkshire to write and rehearse new music.
Traffic signed to Island Records label and their debut single "Paper Sun" became a UK hit in mid-1967. Their second single, Mason's psych-pop classic "Hole in My Shoe", was an even bigger hit, and it became one of their best-known tracks, but it set the stage for increasing friction between Winwood and Mason, the group's principal songwriters.
The rest of their career involved various personnel comings and goings (Winwood joined Blind Faith for a year) and Dave Mason even rejoined again for a short period. They had varying success, although scoring with John Barleycorn Must Die and The Low Spark of High Heeled Boys (Nov. 1971), which was a Top 10 American album athough did not chart in the UK. Sadly Chris Wood died in 1983 and Jim Capaldi in 2005. The above was adapted from Wikipedia.
I have put together a slide show video for this song, hopefully matching up images to the music. Comments are invited.
I've also uploaded a live version of this song, which can be found here: https://www.youtube.com/watch?v=REzzJmZ4HV8