In a large bowl, cream the butter, shortening and 2 cups sugar until light and fluffy. Add eggs, one at a time, beating well after each addition.
Combine milk and vanilla; set aside. Sift together flour, baking powder and salt; add to creamed mixture alternately with milk mixture, beating just enough after each addition to keep batter smooth. Combine cinnamon and remaining sugar; sprinkle 1-1/2 teaspoons into a greased 10-in. tube pan.
Pour one-third of batter into pan. Sprinkle half of remaining cinnamon-sugar; top with one-third of batter. Repeat with remaining cinnamon-sugar and batter. Smooth top with spatula. Bake at 350° for 1-1/4 hours. Cool for 10 minutes before removing from pan to a wire rack to cool completely.