Sylia Francis had always wanted to take piano lessons but couldn't afford them. So when the 29-year-old Manhattan travel agent found herself caring for the children of a concert pianist, she traded her baby-sitting hours for instruction and practice time.

In Mesa, Ariz., meanwhile, McDonnell Douglas Helicopter was saddled with excess nuts and bolts that were officially worth $16 million, but that would bring only $500,000 from liquidators. So the company traded the items to a corporate barter concern for 16 million trade credits, which McDonnell can use with cash to obtain the services and merchandise of other corporate barterers.

Barter--the non-cash exchange of goods and services--is a time-honored way of doing business. But in hard times it can become a particularly effective way of remaining competitive or getting otherwise unaffordable items.

"Bartering is for people who have the time and not the business," says Robert Meyer, editor and publisher of Barter News, a trade publication in Mission Viejo. "For years, barter has been associated with an underground economy. But we're talking big business here. And it's growing. Many smaller companies are doing 6% of their business in a trade manner. They use it as a competitive edge."

It wasn't until 30 years ago that bartering became an industry, after the advent of small computers made it possible to cheaply track many transactions involving different parties at different times. During the past decade, the business has grown from $200 million a year to $1 billion, Meyer says. Internationally, he says, the leap is greater and barter now accounts for about $1 trillion--or a quarter--of international trade.

Lots of people barter informally. An antique dealer recently approached Greg Murray, 48, a New York English teacher with a part-time furniture refinishing business, about restoring a Victorian dresser in exchange for an antique pool table and a radial arm saw, worth $1,600. Says Murray, "The job they wanted me to do was worth $350."

Others trade through barter organizations (also called trade clubs), which serve as brokers between small businesses wishing to trade services. To trade clubs, small businesses are those with less than $10 million in sales or 100 employees for service-oriented businesses or 500 for manufacturers.