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Ham and Cheese Chowder

1/2 c. water
Dash of salt
2 c. peeled, cubed potatoes
3 tbsp. oleo
1 c. chopped onion
3 tbsp. flour
Dash of pepper
3 c. milk
1 1/2 c. diced, cooked ham
1 1/2 c. shredded Cheddar cheese
Croutons (optional)

Place water and salt in small pot; bring to a boil. Add potatoes and reduce heat. Cook 15 minutes or until potatoes are tender. Drain potatoes, reserving liquid. Set potatoes aside. Add enough water to potato liquid to make 1 cup. Set aside. Melt oleo in 3 quart Dutch oven. Add onion and saute until tender. Blend in flour and pepper. Stir in milk and potato liquid. Cook over medium heat until mixture is bubbly and slightly thickened. Add cooked potatoes and ham, beating gently. Remove from heat and stir in cheese. Top with croutons if desired.

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