SAUCE:

1 clove garlic, chopped
1/4 c. onion, chopped
Sliced fresh mushrooms to taste
Olive oil
1 (8 oz.) can tomato sauce
1 (32 oz.) can tomatoes
1 (6 oz.) can tomato paste
1/4 c. water
1 tsp. sugar
1 tsp. salt
1/4 tsp. pepper
1/4 tsp. oregano
1/4 tsp. basil
1/8 tsp. parsley
1/8 tsp. chili powder
1 bay leaf

MEATBALLS:

2 lb. ground beef
1 c. Italian bread crumbs
4 eggs
Chopped onion to taste
2 tbsp. garlic
2 tbsp. dried parsley
Olive oil

SAUCE: Cover bottom of 4-quart saucepan with olive oil. Brown garlic, onion, mushrooms in oil. Add remaining ingredients and simmer uncovered over medium low heat until thick, 2-3 hours.

MEATBALLS: Combine all ingredients. Mix together to form balls. If too sticky, add more bread crumbs; if stiff, add egg. Brown meatballs in olive oil on all sides. Add to sauce.