1. Preplare gelatin, following label directions, using 3 1/2 cups water; pour into 8x8x2-inch square pan; chill at least 4 hours, or overnight.
2. Measure flour, baking powder and salt into sifter.
3. Beat, shortening with sugar until fluffy in large bowl of electric mixer at high; speed; beat in egg and vanilla.
4. Sift in dry ingredients, alternately with milk, blending well after each addition; pour into a greased 8x8x2-inch baking pan.
5. Bake in moderate oven (350°) 45 minutes, or until center springs back when lightly touched with fingertip; cool on wire rack 15 minutes; loosen around edges and turn out; cool.
6. Split cake, crosswise, into 2 layers; place bottom layer on cake plate; unmold gelatin on small cookie sheet rinsed with cold water, slide onto cake layer; top with second layer; sprinkle with 10 X sugar. Decorate as you wish.