1. Place the onion slices in a large bowl. Set aside.
2. Drop the beets into a large pot of boiling water for 1 minute. Drain the beets over the bowl of onions, allowing the onions to wilt.
3. When cool enough to handle, slip the skins off the beets.
4. Drain the onions, reserving 1 1/2 cups of the water. In a small saucepan combine the reserved water, vinegar, peppercorns, bay leaves, and salt. Bring the mixture to a boil.
5. Meanwhile, pack the beets and onions into a quart-size jar. Pour in enough of the vinegar mixture to come to within 1/4 inch of the rims. Seal with the lids. Let the beets stand at room temperature for 24 hours, then refrigerate.
Note: Before pickling foods, sterilize the jars and their lids by boiling them in enough water to cover for 10 minutes. Leave them in the hot water until ready to use.