The idea of a tramway linking the Rivers Severn & Wye is first considered.
"The Lydney & Lydbrook Railway" as the S&W is known at this point, is secured by Act of Parliament
Contracts to construct the tramway are let.
Traffic starts using the tramway, but is soon halted due to revenue being lost owing to the lack of weighing machines, weights being a factor in the tolls to use the tramway. A second Act of Parliament changes the company name to the "The Severn & Wye Railway and Canal Company".
The financial problems that plagued the S&W throughout its history have started, with share capital being insufficient to complete such works as Lydney Habour. Another Act is passed to increase share capital.
Debts of over £15,000 are reported at this point.
Another Act eases the financial burdens.
The traffic on the tramline increases during this period, but the company spends considerable amounts of money on blocking new lines into the Forest.
The Dean Forest Mines Act is passed which changes working practices in the Forest. The Severn & Wye starts coming under pressure to improve the tramway services.
The Severn & Wye contests the rival Forest of Dean Railway's plans to construct a new harbour and line in the eastern valleys. The plan is dropped.
The South Wales Railway apply to purchase the tramway with a view to building a line alongside it. Although the Severn & Wye agree in principle to this, the plan stalls over the selling price.
The Severn & Wye and South Wales Railway again clash over the Forest Of Dean tramroad, this time over its conversion to an edged railway. Although the plan goes ahead, the S&W gains a concession of £15,000 to assist its conversion to broad gauge.
The South Wales line opens. The interchange facilities at Lydney serve to highlight the differences between the two lines.
Proposals to convert the line to a single broad-gauge line are submitted to the Commissioners of Woods. In order for the scheme to be approved the S&W must allow a central line into the Forest to built independently of them. The S&W objects and negotiations cease.
A scheme is submitted to Parliament in which the S&W improves the tramway rather than convert to a railway and become carriers themselves by using locomotives. The scheme is sanctioned, but locomotives do not appear until 1864.
The first locomotive, an 0-4-0 tank engine is delivered to Lydney for use on the tramway.
The fifth and last locomotive for the tramway is delivered.
An anonymous offer is made for the S&W but nothing comes of it.