Potato Cheese Soup

3 medium potatoes (about 1 lb.), peeled and quartered
1 small onion, finely chopped
1 c. water
1 tsp. salt
3 c. milk
3 T. butter or margarine, melted
2 T. flour
2 T. minced fresh parsley
1/8 tsp. white pepper
1 c. (4 oz.) shredded cheddar cheese

In a saucepan, bring potatoes, onion, water and salt to a boil. Reduce heat; cover and simmer until potatoes are tender. Do not drain; mash slightly. Stir in milk. In a small bowl, blend butter, flour, parsley and pepper; stir into the potato mixture. Cook and stir over medium heat until thickened and bubbly. Remove from the heat; add cheese and stir until almost melted. Yield: 6 servings (1 1/2 quarts).