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Madison's days as a leading Indiana city were numbered, however, when river traffic declined and new railroads built between Louisville, Indianapolis, and Cincinnati tapped into Madison's trade network.As a result, Madison's growth did not continue at the same pace it had experienced before the Civil War.35.1% of all households were made up of individuals and 14.4% had someone living alone who was 65 years of age or older.The average household size was 2.18 and the average family size was 2.79. 21% of residents were under the age of 18; 7.8% were between the ages of 18 and 24; 25% were from 25 to 44; 28.9% were from 45 to 64; and 17.2% were 65 years of age or older.The gender makeup of the city was 44.8% male and 55.2% female.
In 2006, the majority of Madison's downtown area was designated the largest contiguous National Historic Landmark in the United States—133 blocks of the downtown area is known as the Madison Historic Landmark District. It is bordered to the south, across the river, by the city of Milton, Kentucky. US-421 leads north 26 miles (42 km) to Versailles, Indiana, and south 23 miles (37 km) to Campbellsburg, Kentucky.
Indiana's first railroad, the Madison & Indianapolis Railroad, was built there from 1836 to 1847.
Chartered in 1832 by the Indiana State Legislature as the Madison Indianapolis & Lafayette Railroad, and construction begun September 16, 1836, the railroad was transferred to private ownership on January 31, 1843, as the Madison & Indianapolis Railroad.
Madison's location across the Ohio River from Kentucky, a slave state, made it an important location on the Underground Railroad, which worked to free fugitive slaves.
George De Baptiste's barbershop in town became a nerve center of the local group.