Cream butter, lard and sugars. Add one egg at a time and mix thoroughly. Add vanilla. Sift dry ingredients and add to creamed mixture. Stir in nuts.
Chill dough until easy to handle. Shape in balls and dip tops in sugar. Arrange 2 inches apart on cookie sheet. Sprinkle several drops of water on each ball of dough.
Bake at 350 degrees for 15 minutes.