In the cliffs on the 'other' (English) side was a square hole cut into it's side, and a painted Union Flag.
Luckily for me there was a blue plaque on the ground with an explanation.
In the 1850's a local antiquarian had asked locals about it, and they had said that it was originally an entrance to a larger cave that had been squared off and enlarged. A crane was built into it so that large ships that couldn't moor in the shallower Welsh side could moor by the cliff and be unloaded. The cargoes were then moved onto smaller Severn Trows. I've always loved the Severn Trow, it is a really lovely boat with a good shape and sails.
Severn Trows- http://www.forestprints.co.uk/severn_trows.htm
The square hole leads to a much bigger space, 27 feet deep and wide and 15 feet at it's highest point.There are a couple of other stories, one of which is that Isambard Kingdom Brunel stored explosives in it when he was building the Chepstow Railway Bridge.The Shirenewton Quakers might have stored Tea in it too. From 1688 The Quakers in Shirenewton were known to have visited many homes....and of course drank a lot of tea!
The Cave could have been used for smuggling and for the hiding and storage of people and goods. In the 15th century Chepstow had an illicit trade dealing with Icelandic dried fish. All along the Severn were regular smuggling haunts., smuggling wine, tobacco, cotton and sugar. If only the walls of the cave could talk, being so close to the Castle it must have some great stories.
The union flag had been painted by Salmon fishermen in 1935 to celebrate George V Silver Jubilee. I always thought that it was only called a Union Jack when it was flying from a pole but I could easily of got this quite wrong. When it is a high tide the River Wye sometimes covers it with its tidal rise of forty feet is second only to the tidal rise of 46 feet in the Bay of Fundy in Nova Scotia.
This next clip is from Pathe news, It's called Twicken Ferry http://www.britishpathe.com/video/the-jubilee-duettists/query/Silverham ....I know its not about Chepstow but I couldn't resist adding it.. and its always good to finish with a song !