Preheat oven to 325 degrees (175 C.). Grease a 13 by 9 inch glass baking dish.
In a 2 quarts (1900 ml) saucepan, heat milk just to boiling over medium-high heat.
Meanwhile, toast bread. Spread butter on 1 side of slices; cut each diagonally into quarters.
In medium bowl, beat eggs, sugar, vanilla, and salt until blended. Gradually whisk hot milk into egg mixture until well combined. Pour custard into baking dish. Arrange bread, buttered side up, on top of custard; sprinkle with nutmeg.
Set baking dish in large (17 x 11½ inch) roasting pan; place pan on oven rack. Pour enough boiling water into pan to come halfway up sides of baking dish.
Bake custard 50 to 60 minutes or until knife inserted in center comes out clean. Transfer baking dish to wire rack; let stand 15 minutes to cool before serving. Or cover and refrigerate to serve cold later.