A Sioux City, Iowa cemetery refused to bury his body because he was Native American, touching off a national episode culminating in President Harry Truman ordering his body to be interred in Arlington National Cemetery. Rice was awarded the Bronze Star for heroism during the New Guinea campaign, and he was killed leading a squad of Company A, 8th Cavalry Regiment, during the Battle of Tabu-dong "one of the most critical and heroic stands made by the hard-pressed United Nations forces."
During his funeral on August 28, 1951—at the Memorial Park Cemetery in Sioux City, Iowa—a cemetery employee noticed there were a lot of Native Americans among the mourners. After the military burial service, including the ceremonial three-volley salute, cemetery officials discovered that Rice himself was Native American.
They stopped the actual burial, and made his non-Indian wife Evelyn take his body away.
According to cemetery officials, "Private cemeteries have always had a right to be operated for a particular group such as Jewish, Catholic, Lutheran, Negro, Chinese, et cetera, not because of any prejudice against any race, but because people, like animals, prefer to be with their own kind."
The following day, then-President Harry Truman publicly reprimanded the cemetery and the Sioux City town leaders. Rice’s wife was given a plot in Arlington National Cemetery.
The press, and local groups in Sioux City also lambasted the Sioux City cemetery. Sergeant Rice was buried with full military honors on September 5, 1951, nearly a year to the day after he died, in Arlington National Cemetery between two generals.