Dissolve yeast in 1/4 cup warm water, stirring well; let stand 10 minutes or until bubbly.
Let milk cool to 105° to 115° in a large bowl; add warm water, sugar, 1 1/2 tablespoons butter, shortening, and salt, stirring well. Add dissolved yeast; stir well. Stir in enough flour to make a soft dough. Cover and let stand 15 minutes.
Turn dough out onto a floured surface, and knead 10 minutes or until smooth and elastic. Place dough in a greased bowl, turning to grease top. Cover and let rise in a warm place (85°), free from drafts, 1 hour or until doubled in bulk.
Punch dough down; turn out onto a lightly floured surface. Divide dough in half, shaping each into a smooth ball. Cover; let rest 10 minutes.
Shape each portion into a loaf; place in 2 greased 9- x 5- x 3-inch loaf pans. Brush tops of loaves with butter. Cover; repeat rising procedure 45 minutes or until doubled in bulk. Bake at 450° for 10 minutes; reduce heat to 350°. Bake 30 minutes or until loaves sound hollow when tapped. Remove from pans immediately; cool on wire racks.