Scald the onions for 2 minutes in boiling water, dip into cold water and peel. Sprinkle the onions with the salt, add cold water to cover, and let stand for 12 hours or overnight. In the morning, drain the onions, rinse them in cold fresh water and drain again. Combine the sugar, vinegar, mustard seeds, and horseradish or peppercorns, bring to a boil, and simmer for 15 minutes. Pack the onions into clean jars. Add 1 small hot pepper and 1 bay leaf to each jar, fill the jars with boiling-hot liquid and seal. Makes 5 - 6 pints.
NOTE: You can also add 6 T whole allspice or 1/4 c mixed pickling spices for interesting variations.