Adjust the oven racks so that a pan of water will fit on the lowest rack and the cake can sit on a rack just above it and preheat the oven to 350 degrees F. Grease and flour a 10-inch tube pan and set aside.

In the bowl of a mixer with a paddle attachment, cream together the butter and sugar. Add the eggs, 1 at a time, beating well after each addition.

Sift the flour, baking powder, and salt into a clean bowl. With the mixer on low, gradually add the flour mixture to the butter mixture, alternately with the 2 tablespoons of bourbon. Fold the nuts into the batter and pour the mixture into the prepared pan.

Place a pan of water on the lowest oven rack and bake the cake on the rack just above the water for 1 hour and 10 minutes, or until a toothpick inserted into the center, comes out clean.

Cool the cake on a wire rack for 15 to 20 minutes. Remove from the pan and allow cake to cool completely. While cake is cooling, soak enough cheesecloth to wrap around the cake in 1/4 cup bourbon. When the cake has cooled, wrap the cheesecloth around the cake, wrap the entire cake with plastic wrap, and store in the refrigerator. This cake is best if allowed to sit in the refrigerator for 1 to 2 weeks, rewetting the cheesecloth with bourbon as needed. We recommend rewetting the cheesecloth every 2 to 3 days, or as it dries out.

Serve with sweetened whipped cream.