The town is on the north side of the Kentucky Bend in the Mississippi River, which is also known as "New Madrid Bend" or "Madrid Bend." The river curves in an oxbow around an exclave of Fulton County, Kentucky. Scientists expect the river eventually to cut across the neck of the peninsula and make a more direct channel, leaving the Kentucky territory as an island.
New Madrid was the epicenter of the very powerful 1811–12 New Madrid earthquakes.
In the antebellum period, this fertile floodplain area was developed for cotton plantations, based on the labor of enslaved African Americans. They were emancipated after the Civil War and worked to make new lives. As whites struggled to re-establish dominance after the Reconstruction era, they intimidated and attacked blacks under the guise of Jim Crow laws, working to suppress voting and control their activities. Three African-American men are documented as being lynched by whites in New Madrid, the county seat, near the turn of the century: Unknown Negro, on November 29, 1898; Louis Wright, a musician in a minstrel show accused of altercations with whites, hanged on February 17, 1902;[9] and unknown Negro, May 30, 1910.[10]
By the turn of the 20th century, some industry was being developed in New Madrid, which contained two lumber mills, a grist mill, a stave and heading factory, and a cotton gin. It was considered a rough town.[9] There were four Protestant churches, two with independent African-American congregations, and one Catholic church.[11] In 1900, 1,489 people lived in New Madrid; in 1910, the population was 1,882.