Sprinkle salt and pepper evenly over steaks. Set aside.
Combine cracker crumbs, 1 cup flour, baking powder, 1 teaspoon salt, 1/2 teaspoon black pepper, and red pepper.
Whisk together 3/4 cup milk and eggs. Dredge steaks in cracker crumb mixture; dip in milk mixture, and dredge in cracker mixture again.
Pour oil into a 12-inch skillet; heat to 36
(Do not use a nonstick skillet.) Fry steaks 10 minutes. Turn and fry 4 to 5 more minutes or until golden brown.
Remove to a wire rack on a jellyroll pan. Keep steaks warm in a 225 oven. Carefully drain hot oil, reserving cooked bits and 1 tablespoon drippings in skillet.
Whisk together remaining 1/4 cup flour, 1 teaspoon salt, 1 teaspoon black pepper, and 4 cups milk.
Pour mixture into reserved drippings in skillet; cook over medium-high heat, whisking constantly, 10 to 12 minutes or until thickened.