In a large saucepan over medium heat, cook bacon until lightly crisp, 4-5 minutes. Using a slotted spoon, remove bacon and place on a paper towel lined plate.
In the same saucepan over medium high heat, cook the potatoes until tender, about 12 minutes, stirring occasionally. Add the reserved clam liquid and bring to a boil. Cover, reduce heat to medium and simmer for 5 minutes.
Discard bay leaf and lightly mash the potatoes with a fork. Stir in the cooked bacon, clams, and milk and cook for 5 minutes until heated through but not boiling.