In a 2 qt. saucepan melt the butter and saute the celery and onions for 5 minutes. Stir in the flour and cook for 2 minutes. Pour in the milk and chicken stock and stir well to combine. Bring to a gentle boil.
Add the bay leaves, nutmeg, cayenne pepper, salt, ground pepper and mustard and blend well. Reduce the heat to simmer.
Add the diced potatoes and simmer for 5 minutes until the potatoes
are almost cooked but still firm. Stir in the grated cheeses until melted then add the diced ham. Simmer for another 5 minutes.
Remove bay leaves and serve soup garnished with chopped scallions
and grated cheddar cheese.
Makes 4-6 servings