Shred the cabbage. Simmer in just enough water to cover cabbage for 10 minutes. Drain thoroughly and set aside. Melt the butter in a saucepan. Add the onions and saute for 5 minutes, do not brown them. Blend in the flour, salt, pepper, and nutmeg. Add the milk a little at a time and blend well, stirring constantly. Let the mixture come to a boil and add the bay leaf. Reduce the heat to a bare simmer and heat for 20 minutes. Remove the bay leaf. Stir in the cabbage with about 3/4 cup of the cheese. Taste for seasoning and turn the mixture into a baking dish. Combine the rest of the cheese with the bread crumbs, sprinkling over the top of the dish. Bake for 15 minutes at 400 degrees.