Using solid vegetable shortening, lightly grease the inside of a 10 by 4 1/2 inch tube pan (without a removable bottom) Line the bottom of the pan with brown paper or waxed paper that has been cut to fit. Lightly grease paper with shortening.
Put nuts into a large mixing bowl.
Sift flour, bsking powder, and salt over a piece of waxed paper and set aside.
In a measuring cup, combine milk with rum or brandy and set aside.
Preheat oven to 275 F.
In a large bowl, beat butter and sugar at medium speed until mixture is smooth and very light and fluffy. Add eggs, one at a time, beating thoroughly after each addition.
Reduce speed to low; beat in flour mixture (in fourths), alternating with the milk mixture, beginning and ending with flour. Pour batter over nuts and mix well with a rubber spatula.
Turn batter into prepared pan and spread evenly. Bake 2 1/2 hours, or until test done. Remove cake from oven and place on wire rack to cool 30 minutes.
Turn cake out of pan; discard paper and place cake on a wire rack to cool completely. Pour the sherry over the baked cake then cover it with cheesecloth. Store cake in a cool place for several days to mellow. To serve, sprinkle with confectioners' sugar