Ellen's Swedish Meatballs

In large skillet, saute onions in 2 tablespoons butter until golden. Meanwhile, in large mixing bowl, beat egg; add milk and bread crumbs. Let stand 5 minutes; add 1 1/4 teaspoons salt, 2 teaspoons of sugar, next 4 ingredients, and onions. Blend well with a fork. In same skillet, heat remaining 2 tablespoons of butter. Using 2 teaspoons, shape meat mixture into small meatballs, about 1/2 to 3/4 inch in diameter. Drop meatballs into skillet; brown well on all sides; remove to warm casserole dish; repeat until all meat is browned. Then, into fat left in skillet, stir 1 teaspoon of sugar, flour, and remaining 3 ingredients; adding water and cream slowly; stir until thickened. If desired, return meatballs to gravy; heat thoroughly. Or serve meatballs in covered casserole with gravy in a separate covered dish.