Fry the bacon in a large, heavy skillet until crisp. Remove the bacon, drain on paper towels, then crumble; reserve the bacon fat. Dissolve the cornstarch in the water. Saute the onion and celery in the reserved bacon fat over medium heat for about 5 minutes, until the onions are translucent.
Add the salt, sugar, pepper, and dissolved cornstarch to the skillet. Next adfd the vinegar and bring to a boil over medium heat for three minutes. Add the hot potatoes and crumbled bacon, stirring gently. Serve hot.