Add butter and sugar in a mixing bowl. Using an electric mixer cream the butter and sugar until it is light in color and is fluffy. (Cream for at least 3-4 minutes. Do not skimp of the time)
Now you can mix in the molasses and vanilla to the mixing bowl Mix well until combined with the butter/sugar mixture. Continue to mix until the molasses is completely mixed. As necessary scrape down the sides of the bowl to mix.
Add the eggs, one at a time. Mix well after each egg has been added. Scrape down the sides of the mixing bowl.
In another large bowl combine the dry ingredients. In a small measuring cup add the milk and water. Set aside.
Add half of the dry ingredients to the batter. Mix until well incorporated. Pour in the milk and water mixture beating until well combined. (Batter may have the appearance of being curdled.)
Add the rest of the dry ingredients to the bowl and mix well.
The batter will have the appearance of being smooth. There will no longer have the appearance of being curdled. Scrape down the sides of the mixing bowl to incorporate all of the ingredients.
Divide the cake batter between the three prepared cake pans.
Bake at 350 degrees for 24-27 minutes. (Or until an inserted toothpick comes out clean or with very few crumbs.)
Remove the baked cakes from the oven. Set the cakes aside to allow them to cool slightly. (About 2-3 minutes)
Once the cakes have cooled, remove them from the pans to begin frosting.
Wash mixing bowl and beaters to prep to use for the frosting.