Potato And Cheddar Soup


2 c. water
2 c. red potaotes, peeled and cut into cubes
3 T. butter or margarine
1 small onion, finely chopped
3 T. flour
Red and black paper to taste
3 c. milk
1/2 t. sugar
1 c. shredded Cheddar cheese
1 c. cubed cooked ham

Bring water to boil in large saucepan.
Add potatoes; cook till tender.
Drain; reserve liquid. Measure 1 cup, adding water if necessary.
Melt butter in saucepan over medium heat.
Add onion; cook and stir until tender but not brown.
Cook 3 to 4 minutes.
Gradually add potatoes, reserved liquid, milk and sugar to onion mixture; stir well.
Add cheese and ham. Simmer over low heat 30 minutes, stirring frequently.