I am not too sure on the Navy part as I found this on another site and I have no Navy experience, but it is said that that this is served over toast at breakfast and it is also great on hot dogs.
- Crumble the ground beef into a skillet and brown with the onions.
- If beef is very lean, add a tablespoon or two of cooking oil.
- Salt and pepper to taste.
- Add flour, one tablespoon at a time, stirring and cooking each spoonful, before adding the next.
- The flour must be cooked to preclude a starchy taste through out.
- Add enough flour to absorb most of the oil.
- Stir in the tomatoes and the tomato juice, followed by the water.
- Allow to simmer on low heat to thicken.
- Adjust consistency as necessary.
- Add nutmeg and sugar and adjust to taste.