Slice potatoes and put in sauce pan, cover with water-bring to boil. Remove immediatly from heat and drain. Put in a 2 qt greased baking dish.
While potatoes are cooking, make the white sauce, Melt 3 T. butter in sauce pan, stir in flour, salt and pepper. Cook over low heat til starts to bubble, remove from heat and stir in milk slowly, return to heat and bring to boil. When thick, add the cheese, and stir til cheese is melted.
Pour over the potatoes that are in the baking dish and add the ham. Bake at 350 for 1 hour. I like to add more ham as I LOVE ham..