Cream butter and sugar. Add eggs, one at a time, then vanilla. Sift baking powder in with flour. Add flour mixture alternately with evaporated milk, beginning and ending with flour. Stir in walnuts.
Pour batter into greased and floured tube pan.
Start in cold oven, and do not open oven door during baking! Bake at 325°F for 1 hour 45 minutes. Remove from pan immediately. Turn out onto rack to cool completely. Dust with powdered sugar, if desired.