The high volume of mineral activity in the area kept the company in good financial health for many years, but it failed to keep abreast of competing developments, and faced with unforeseen major loss of business it sold the rights to operate its network to the Great Western Railway in 1875.

For centuries the mineral wealth of Monmouthshire had been exploited, especially in the manufacture of iron; the necessary raw materials were all at hand: coal, ironstone, limestone, and timber.

3. c. 102), and the act included permission to build connecting tramways or plateways (or alternatively "stone roads") to pits within seven miles of the canal,[note 1][2][page needed] and to raise £120,000.

[3][page needed][4][5] There was a considerable fall from the top of the canal to Newport: the Pontnewynydd arm descended 447 feet, using 42 locks; there were two tunnels.

In addition Outram recommended further reservoir capacity for the canal, and conversion of all the existing tramroad connections to plateways, in which the rails are L-shaped plates, the vertical flange providing the guidance to unflanged wheels; the gauge was to be 4 ft 2in.

The engine did, however, start from the Works early in the morning, but unfortunately, at one of the crossings in the tramroad... the wheels got out of the tram-plates, which caused a detention of some hours, and on coming through Tredegar Park, the chimney was carried away by a branch of a tree hanging over the tram-road; and in consequence of these accidents it did not arrive at Newport till the evening.

[3][page needed] Mr Prothero of Newport ordered a locomotive from Price and Co. of Neath Abbey, to convey coal from his collieries at Blancyffin Isha to Pillgwenlly.

The Rumney Tramroad was under construction, running on the eastern side of the Rhymney Valley it joined the Monmouthshire Tramway at Tydu (later named Bassaleg), and ran along the Park Mile.

He was critical of the combination rail and wheel arrangement, and he recommended that "proper" railway track should be used, laid adjacent to the existing tramplate to allow for continued operation during the conversion.

to the yard, and was described as a kind of rail and tramplate combined in such a way that neither would interfere with the other, but would allow the present antiquated trams and the locomotive engines to travel with perfect safety and ease.

[3][page needed] In fact at the half-yearly shareholders' meeting on 15 May 1850 it was announced that "as regards the western valleys the whole of the goods and mineral traffic is now conveyed by means of locomotive power".

[3][page needed] The operation of the tramroad gave an enormous boost to the efficiency of the coal and iron industries, but of course only in the areas of the Western Valley that it served.

The proprietors of the Monmouthshire Canal Navigation themselves proposed a railway to head off the competitive threat, and to alter all their tramroads to "make them suitable for locomotive haulage" and to become the carriers themselves.

c. cxx) was passed, allowing an extension of time for construction, authority to carry passengers, and a change of name to the Monmouthshire Railway and Canal Company.

[16][page needed] They were freed from the obligation to provide mineral wagons, but locomotives remained their responsibility, and horse traction was to be prohibited when passenger operation started.

c. ccclxxi) giving them the authority to purchase the entire works of the Monmouthshire Canal system, including all the railways; The First General Meeting of the Monmouthshire Railway Company was held [on 11 September 1846]... After congratulating the proprietors on obtaining the Act of Parliament, which received the Royal Assent on 13 August last, [the Managing Committee report] referred to the present state and future prospects of the Company.

The so-called Cardwell Clause in all Railway Acts enabled them to demand the completion of lines for which parliamentary powers had been given, and the issue turned acrimonious.

[21][page needed] The Eastern and Western Valley sections were not connected at Newport, due to objections from the town council to street running.

An application was made in 1852 within a parliamentary bill to stop up the canal from the Mill Pond to Potter Street lock near the dock, and to seek more capital.

A total of £200,000 was required to complete the conversion in the Western Valley, to provide a depot for carriages, locomotives and other stock, together with all the necessary buildings, workshops and essential machinery.

The Eastern Valley too received an improved Newport terminal: on 9 March 1852 the line was opened from Marshes Turnpike Gate to Mill Street.

In 1858 the Western Valley Line was extended from Blaina to Nantyglo, and in 1864 the Cwmtillery branch was acquired; it had been built privately by a Mr Russell in 1858.

A lease to the West Midland Railway began to be considered, and early in 1861 agreement was struck; however shareholders rejected the proposal and decided to remain independent.

Further up the Ebbw Fach Valley, the Monmouthshire Railway had terminated at Coalbrook Vale, where it joined Joseph and Crawshay Bailey's tramroad to Brynmawr.

The Monmouthshire Railway had established a goods station at Brynmawr from 15 December 1849, but for some years passenger services were not extended beyond Nantyglo Gate at Blaina.

After approval by the Board of Trade, it was thought that LNWR trains from the Sirhowy line would run into Newport from Tredegar, but this did not take place for some time.

The new company was to acquire the old Caerleon Tramroad and convert it to a modern railway route between Maindee, immediately east of the GWR station at Newport High Street, and Pontypool, by-passing the entire Eastern Valley line.

In the absence of parliamentary authorisation, this was not possible in the short term, but after consideration running powers over the whole Monmouthshire system were granted to the GWR.

Additional sidings were laid at Pontypool for the Admiralty coal traffic, making the marshalling yards the largest in Wales and the West of England.

The line was severed in July 1982 when a double-decker bus ferrying day-trip passengers on a route normally only used by single-deck buses, crashed into a low bridge in Pontrhydyrun.