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According to the cemetery officials, they weren't being prejudiced, just enforcing a policy based on people's wish to be with their own kind. They insisted they had legal obligation to the rest of plot owners in the cemetery.
After a big firefight in the press, then-President Harry Truman publicly reprimanded the cemetery and the Sioux City town leaders. Rice's family were invited to bring him to be bured at Arlington National Cemetery in Washington. Sergeant Rice (who was also a WWII veteran) was buried with full military honors on September 5, 1951, nearly a year to the day after he died, in Arlington National Cemetery between a couple of generals.
Sources: Find-a-Grave, Sioux City History
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