I came across this disease while going through Ayer's Every Man His own Doctor ©1880. An Online Dictionary defines it:
White swelling (Med.), a chronic swelling of the knee, produced by a strumous inflammation of the synovial membranes of the kneejoint and of the cancellar texture of the end of the bone forming the kneejoint; -- applied also to a lingering chronic swelling of almost any kind.
Dr. Ayers wrote this:
This is a disease of one of the larger joints. It is mostly of a slow or chronic character, and occurs chiefly in the knee, although the elbow-joint, hip-joint, and even ankle-joint, are not infrequently the seat of it.
This complaint may result from blows, falls, bruises, cold, fevers, and constitutional disorders.
Early attention to this disease will prevent, in almost every case, its dreadful consequences. When the pain commences in the knee, a blister should be put on, and perfect rest strictly observed. If the pain continue after the blister be healed, not a moment should be lost in putting on a caustic issues. The mere application of caustic has been known to cure the disease, but it is indispensable that the patient should not stand a moment on the limb. Or, in the early stage apply leeches and warm fomentations. If not reduced, put on a plaster made as follows: Reduce to a fine powder two ounces of gum-ammonise; and then add as much vinegar of squalls to it as will form it into a paste, and spread it on a piece of leather and apply.
You can find a pdf file about this disease written in 1894 by A. B. Judson here.