Leaving the skin on the potatoes, boil whole in salted water until fork tender. While the potatoes are boiling, fry bacon until crispy, reserving about half of the drippings.

Slice and layer the potatoes in a shallow dish, sprinkling each layer with salt and pepper and adding chopped onions and bacon to each layer.

In the reserved bacon drippings, add the flour. Whisk until a roux is formed. Add the sugar and then the vinegar and water. Bring to a boil, stirring constantly until thick.

Pour sauce over the potatoes and stir. Taste, and add more sauce as necessary. This potato salad is best if made the day before so the flavors can sink into the potatoes, but can be served right away as well.