Preheat oven to 375°F

In medium sauce pan melt the buter oer medium heat. Add chopped onion, salt and pepper and saute. Remove from heat and whisk in the flour until a smooth paste is formed. Add milk and cook until mixture is thick and bubbling gently.

In a greased (shortening) dish layer half the potatoes, with half of the onion rings and top with half of the sauce mixture. Layer the rest of the potatoes and onions and add rest of sauce.

Bake 375°F covered for 45 minutes, hen remove cover and continue baking for anoher 30 minues