New England Clam Chowder

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4 slices bacon, diced

3 tablespoons butter

1 1/2 cups chopped onion

1 1/2 cups water

2 (10-ounce) cans minced clams, drained, juice reserved

4 cups peeled and cubed potatoes

1 1/2 teaspoons salt

Freshly ground black pepper

3 cups half-and-half

Crackers, for garnish

1/8 cup chopped chives, for garnish