Let eggs stand at room temperature for 30 minutes. Line three greased 9-in. round baking pans with waxed paper; grease the paper and set aside.
In a large bowl, beat egg yolks until slightly thickened. Gradually add sugar, beating until thick and pale yellow. Beat in the water, peels and vanilla. Combine the walnuts, bread crumbs, baking powder, cinnamon, cloves and salt; add to batter. Beat until smooth.
In another bowl and with clean beaters, beat egg whites and cream of tartar on medium speed until stiff peaks form. Fold a fourth of egg whites into the batter, then fold in remaining whites.
Pour into prepared pans. Bake at 350° for 20-25 minutes or until a toothpick inserted near the center comes out clean. Cool for 10 minutes before removing from pans to wire racks. Carefully peel off waxed paper.
For frosting, in a large bowl, cream shortening and butter. Beat in vanilla. Gradually beat in sugar. Add milk; beat until light and fluffy. Spread frosting between layers and over top and sides of cake. Garnish with toasted walnuts. Yield: 15 servings.