William Marsh Rice was born in Springfield, Massachusetts on March 14, 1816. He was the third of ten children born to David and Patty Hall Rice. Little is known about Rice's childhood but records indicate that he worked for a while as a shopkeeper in Springfield before deciding to move to Texas in 1838.
Rice started out in business as a merchant in Houston, Texas. His first business partnership with a Barnabas Haskill was formed in 1840 but dissolved by 1842. In 1844 Rice became a commission and forwarding merchant in partnership with Ebenezer B. Nichols, a Houston businessman. By 1850 Rice's siblings began to follow him to Houston and assisted in his ventures. On June 29, 1850 Rice married Margaret Bremond whose father Paul was one of Rice's many business partners. In the census of 1860, Rice is listed as having $750,000 in real and personal property, making him one of the wealthiest men in Texas at the time.
At least 15 enslaved people were included as Rice’s property in 1860. According to county deed records and newspaper advertisements, Rice purchased, sold, and accepted mortgages on enslaved people; he also attempted to recapture enslaved people who fled him. In addition to extending credit to slaveowners who leveraged enslaved people as collateral, Rice also bought and sold cotton as a substantial portion of his antebellum business.
Rice served on a secession committee in Houston after the 1860 presidential election, and during the Civil War, Rice and his wife Margaret raised money for Confederate soldiers. On August 13, 1863, Margaret Rice died, possibly from cholera or yellow fever. Shortly after his wife's death, Rice went to Monterrey, Mexico and stayed there until August of 1865 when he returned to Houston. In Monterrey, Rice smuggled cotton and manufactured goods across the Texas-Mexico border. Later in the summer of 1865, he went to Massachusetts for business and did not return to Houston until 1866. On June 26, 1867 Rice married for a second time. His second wife was Julia Elizabeth Baldwin Brown, a widow and a daughter of Horace Baldwin, one of the early mayors of Houston. Elizabeth's sister Charlotte was the wife of William's younger brother Frederick.
Rice and his second wife moved to New Jersey to live with Rice's sister Charlotte and her family. Rice and his wife divided their time between New York City and New Jersey with occasional trips to Houston to oversee business.
During one of the Rices' visits to Houston, he was approached by Cesar Maurice Lombardi, who was interested in building a high school in Houston. Rice had been interested in endowing an educational institute of some kind, having revised his will twice previously to include a school for needy boys, first in New Jersey, then in New York City. After the meeting with Lombardi, Rice decided to fund an institute of higher learning in Houston. On May 19, 1891 the charter for the William M. Rice Institute for the Advancement of Literature, Science and Art was incorporated in Austin, Texas. Captain James Addison Baker, William's brother Frederic, Houston businessmen Emanuel Raphael, Cesar Lombardi, James E. McAshan and Alfred S. Richardson were named as the first board of trustees.
In article two of the charter: "(t)he objects, intents, and purposes of this Institution are declared to be the establishment and maintenance, in the City of Houston, Texas, of a Public Library, and the maintenance of an Institution for the Advancement of Literature, Science, Art, Philosophy and Letters; the establishment and maintenance of a Polytechnic school; for procuring and maintaining scientific collections; collections of chemical and philosophical apparatus, mechanical and artistic models, drawings, pictures and statues; and for cultivating other means of instruction ..." The charter also required that the Institute only accept white students, which was changed in 1965. The institute was initially endowed with a promissory note for $200,000 to be paid upon Rice's death. Rice revised his will on September 26, 1896 and left the bulk of his estate to his namesake institute.
During the battle over the estate two lawyers became involved with the proceedings and would end up greatly influencing the final results. Captain Baker, a trustee of the Rice Institute, served as William Rice's lawyer. Albert Patrick, the other lawyer, was hired by Orren Holt in 1898 to investigate the residency question in New York City. There Patrick met Charlie Jones, Rice's valet. The two spent a great deal of time together and slowly a plan was formed. At first it seemed that Patrick was only interested in the settlement of the contested will and was looking for any way to win. He convinced Jones, in the spring of 1900, to start poisoning Rice with mercury pills as a way to avoid a court battle. By the summer of 1900 Patrick came up with the idea to forge a will that left the majority of Rice's estate to himself and small sums to relatives and friends. The forged will was dated June 30, 1900.
On September 8, 1900 a hurricane struck the Gulf Coast and one of Rice's businesses, the Merchants and Planters Oil Company, suffered severe damage. The business manager telegraphed that they needed money for repairs and the sum was most of what Rice had available in his bank account. Patrick was worried at the loss of such a large sum of ready cash and he convinced Jones to use chloroform to kill Rice. On September 23, 1900 Rice was murdered by Jones. Patrick, in his haste to get hold of Rice's cash, tried to withdraw money from Rice's bank using a check forged by Jones right after Rice's death. The bank refused to honor the check since Patrick's name was spelled incorrectly. When calling to verify the check with Rice, the bank learned that he was dead. Since the circumstances were suspicious, the bank contacted Rice's Houston lawyer, Captain Baker.
When Baker arrived in New York City, he learned there had been a new will written up by Patrick. Baker was suspicious of the will since Rice had never notified him of any changes to the one Baker had drawn up on September 26, 1896. This suspicion led to a long and sensational trial where Patrick's version of the will was exposed as a forgery and the scheme to kill Rice was discovered. Patrick was found guilty of murder and forgery on March 26, 1902 and was sentenced to die in the electric chair. Jones, who confessed to his part of the events, ended up being released despite being the one who had actually committed the murder. Patrick's sentence was commuted to life imprisonment by the governor of New York, but eventually won a full pardon in 1912.
On February 6, 1902 Orren Holt settled the suit over Elizabeth's will for $200,000. After the trials and settlement, Captain Baker and the original Board of Trustees set about fulfilling Rice's dream to have an institute for higher learning in Houston, Texas. To guide them, the trustees chose as first president, a young mathematician and astronomer at Princeton University named Edgar Odell Lovett, who signed on as president in 1908. Lovett had earned doctorates both from the Universities of Virginia and Leipzig and had taught at Johns Hopkins, the University of Chicago, and Princeton, the most innovative American universities of the time. The trustees sent him on a worldwide tour of the "competition," where he interviewed faculty, inspected facilities, and developed an inspired vision of what might be accomplished on the plains of Texas with a blank-check charter, a generous endowment, and high ambitions. The goal was a university "of the highest grade" that kept "the standards up and the numbers down." Lovett shaped the university that Rice would become.
The Rice Institute opened on September 23, 1912, the anniversary of Mr. Rice's murder, with 77 students and a dozen faculty. An international academic festival celebrated the opening three weeks later, a spectacular event that brought Rice to the attention of the entire scholarly world. Four years later, at the initial commencement, 35 bachelor degrees and one master's degree were awarded, with the first doctorate conferred in 1918.