Clean and slice potatoes in 1/8 - 1/4 inch slices. Parboil in salted water until just tender. Drain and set aside While potatoes are boiling, slice bacon into small pieces and fry in large skillet until crisp, remove to drain on paper towel. Remove all but 1 tablespoon grease from skillet and cook and stir onion in bacon drippings until golden brown. Blend in flour, sugar, salt, celery seed, and pepper. Cook over low heat, stirring until mixture is bubbly. Remove from heat, stir in water and vinegar. Heat to boiling, stirring constantly. Boil and stir 1 minute. Carefully stir bacon and potatoes into hot mixture. Heat through, stirring to coat potato slices.