Cream butter, gradually add sugar and beat well. Combine flour, baking powder, and salt. Combine milk and water. Add flour mixture to creamed mixture alternately with milk mixture, beginning and ending with flour mixture. Mix well after each addition. Stir in flavoring. 

Beat egg whites (at room temperature) until stiff peaks form. Fold into batter. Pour batter into 3 greased and floured 9 inch round cake pans. Bake at 350 degrees for 25 minutes or until a wooden pick inserted in the center comes out clean. Cool in pa ns for 10 minutes; remove layers from pans and let cool completely. Spread Chocolate Frosting between layers and on top and sides of cooled cake. 

Put chocolate in top of a double boiler and place over boiling water. Cook until melted. Remove from heat and add sugar, salt and hot water. Beat briskly till mixture is thoroughly blended. Add egg yolks, one at a time, beating after each addition. A dd butter and vanilla and beat until frosting reaches spreading consistency. Spread on cake. 

Three states can claim Sam Houston as their own:
Virginia the state where he was born; Tennessee the state where he grew up, studied law, married, and began his political and military career; and Texas where he earned his fame. Sam Houston, friend of the Cherokee, teacher, governor, statesman, soldier, even with his human frailties, was a man of his time. Legend says that this cake was taken to Texas from the South and was Sam Houston's favorite.

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