In a saucepan, melt butter. Add flour salt and pepper; cook and stir until a thick paste forms. Gradually add milk. Cook and stir until the mixture begins to thicken. Add cheese; cook and stir until melted. Place potatoes in a greased 13 x 9 x 2 inch baking dish Pour sauce over potatoes. Bake uncovered at 350 F for 1 hour or until potatoes are tender.