Combine the potatoes, onion, egg, chives, flour, salt and pepper in large bowl.
Heat half the oil in large skillet over medium-high heat. Add half the potato mixture in 8 heaping tablespoons to skillet, squeezing out excess liquid from potatoes as you work; flatten each to make 3-inch-round pancake. Cook until golden brown, 3 minutes. Brown other side. Remove to paper-towel-lined baking sheet to drain; keep warm. Repeat with the remaining oil and potato mixture. Serve pancakes with applesauce if desired. Makes 16 pancakes.