Cream butter; gradually add sugar, beating well.
Combine flour, cornstarch, baking powder, and salt; add to creamed mixture alternately with milk, beginning and ending with flour mixture. Mix well after each addition. Stir in the vanilla.
Beat egg whites (at room temperature) until stiff peaks form; fold into batter.
Spoon batter into 3 greased and floured 9-inch round cake pans. Bake at 350° for 25 to 30 minutes or until a wooden pick inserted in center comes out clean. Cool in pans 10 minutes; remove layers from pans, and let cool completely.
Spread peach jam between layers; spread op and sides with Butter Cream Frosting.