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Barnato was born on July 5, 1852, in the East End of London. Barnato came from a Jewish slum, and instead of attending school, he had to eke out a living on the street selling rags and performing magic tricks for children. His real name was Barney Isaacs, but he changed it to Barnato so that he could join his brother in a music hall act.

Barnato arrived in Kimberley, S.A., in 187 3 - He was twenty-one years old, and had in his possession thirty pounds in English currency and forty boxes of defective cigars. He proceeded to sell the cigars to the diggers in the diamond fields. He also gave boxing exhibitions,

performed in a cabaret and traded everything from feathers to garden vegetables. The most profitable trading commodity proved, however, to be diamonds.

Barnato bought diamonds for cash from the diggers and quickly resold them. With his profits, he bought up four unproductive claims on the floor of the Big Hole. Then, to everyone's amazement, these claims began yielding extraordinary quantities of diamonds, even when rain storms made working the adjacent claims impossible. Barnato was accused by other mine owners of having salted his claim with diamonds that he had illegally bought from smugglers and thieves. But the charges were impossible to prove.

Whatever the provenance of his diamonds, Barnato continued to expand his production. With the money he sold them for, he began buying up, piece by piece, the patchwork of claims on the floor of the Big Hole. When cave-ins made it impossible to dig any deeper in the Big Hole, mine owners rushed in panic to sell their claims. Barnato continued to buy these pieces of the jigsaw puzzle. Then, in 1883, he gambled on sinking an underground shaft- the first ever attempted for diamond mining. It worked, and the claims he had bought for a pittance became worth a fortune. just as Rhodes had gained control of the De Beers mine, Barnato got control of most of the Kimberley Central mine.

Rhodes and Barnato controlled the world's two giant diamond mines. A confrontation between these enormously ambitious men became inevitable. Rhodes, if he was ever to have his empire, had to buy out Barnato. He made the first move, attempting, with financial backing from the Rothschild bank in London, to buy one of the few pieces in the Kimberley mine that Barnato did not own. He offered the then staggering sum of 1,400,000 pounds to the French financiers who owned it, not because the diamonds in it were worth that sum but because it would paralyze Barnato's effort to consolidate the Big Hole into a single mine.

When Barnato received word of Rhodes' bold offer, he himself offered 1,750,000 pounds to the French financiers for this crucial section. He had no choice but to outbid his rival.

Rhodes, at this point, decided to offer Barnato a deal that would seem too lucrative for him to refuse. Instead of bidding up the price, which would only benefit the French investors, Rhodes suggested that Barnato withdraw his bid. In return, Rhodes agreed to buy this section of the mine at the lower price and then immediately resell it to Barnato for 300,000 pounds and a one-fifth interest in Barnato's Kimberley Central mine.

Barnato immediately accepted the offer. It permitted him to acquire the section for 1,450,000 pounds less than he had offered, and with it, he could operate the mine as a single entity. He realized that giving Rhodes a one-fifth interest in his mine would provide him with a bothersome wedge into his company, but he assumed that he and his close associates still owned a sufficient number of shares to make it impossible for Rhodes to attempt to gain control. Barnato made the fatal mistake of underestimating Rhodes' ambitions.

Rhodes set about asking the most powerful bankers in Europe, including Rothschild, Jules Porges, and Rodolphe Khan, to help him buy enough stock in Barnato's company to allow him to merge it into his company. He argued that as long as there were competing diamond mines, the market would continually be flooded. Then prices would fall to a pont that the public would realize that diamonds had no intrinsic value.

The bankers were quickly persuaded that Rhodes was right: Diamond mining would only remain profitable if it were done by a monopoly that could systematically restrict the supply. They not only agreed to use the stock that they and their clients held in Barnato's mine to bring about the merger but they also advanced Rhodes money to buy up shares of Barnato's stock on the open market.

The rest simply required an exercise in stock manipulation. Rhodes first drove the price of diamonds down by dumping De Beers' inventory of diamonds onto the market. The price plummeted, and as Barnato's associates unloaded their stock, Rhodes bought it. When no more stock was available, Rhodes and his backers began again bidding up the price, which tripled in three months. By the time Barnato realized that Rhodes was attempting to buy up his company, it was too late. By March of 1888, Rhodes and his associates had acquired the additional 30 percent they needed for control of the Kimberley Central mine.

Barnato had no choice but to acquiesce in the proposed merger. He met Rhodes at the Kimberley Club, and over an amicable lunch they worked out the terms of the consolidation. Barnato would exchange his stock in the Kimberley Central mine for stock in De Beers Consolidated Mines, as the new company would be called. This would make Barnato the largest single shareholder, though Rhodes, with his bankers and allies, would be firmly in control of the new company. Barnato would also be appointed one of four life governors of the monopoly-a position he would hold as long as he lived. The two men then shook hands on the deal. Barnato told him, Rhodes later noted, "You evidently have a fancy for building an empire in the north and I suppose we Must give you the means to do so."

There were still, however, some dissident shareholders in I lie Kimberley Central Company who opposed the merger. They sued Barnato and Rhodes, claiming in court that the new company would no longer be a mining company but an adventure in imperialism. They argued that under the De Beers charter the company might "undertake warlike operations" in central Africa.

To prevent further litigation, Rhodes and Barnato, who between them controlled four-fifths of the stock in the Kimberley Central mine, simply liquidated the company and sold its assets to De Beers. The 5,338,650 pound check that De Beers paid for the assets was framed and hung on the wall of the De Beers boardroom, in which it is still conspicuously displayed.

Barnato, who by now was one of the richest men in the world, returned to the music hall and acted in a number of amateur productions in Kimberley. Then, in 1897, on an ocean liner headed back to England, he either jumped or fell overboard and disappeared beneath a wave.

Rhodes died five years later at the age of forty-eight. His body was buried on a remote mountaintop in Rhodesia. He had never married and he had no heirs. He left almost his entire fortune to Oxford to finance future Rhodes scholars. At De Beers there was no immediate successor to Rhodes, but the vacuum would not remain unfilled for long. Within a year of Rhodes' death another young entrepreneur arrived in South Africa. His name was Ernest Oppenheimer.