Cut steak into 4 serving-size pieces. Trim fat. Place meat pieces between 2 pieces of plastic wrap. Pound meat with a meat mallet to 1/4-inch thickness.
In a dish or on a piece of waxed paper combine bread crumbs, basil or oregano, salt, and pepper. In another shallow dish stir together egg and the 1 tablespoon milk. Dip meat pieces in egg mixture, then coat with bread crumb mixture.
In a 12-inch skillet brown meat pieces in hot oil over medium heat about 3 minutes on each side. Reduce heat to low. Cover and cook for 45 to 60 minutes more or until tender. Transfer meat pieces to a platter. Cover to keep warm.
For gravy, cook onion in pan drippings until tender but not brown. (Add more oil, if necessary.) Stir in flour. Add the 1-1/3 cups milk all at once. Cook and stir until thickened and bubbly. Cook and stir for 1 minute more. Season to taste with salt and pepper. Serve gravy with meat. Makes 4 servings.