Sounds like the DRGW was following standard practice. Nothing particlarly devious, it was all part of the ICC "game".
Once a line had been identified as being unprofitable, unlikely to be able to be made profitable, and a probable candidate for an abandonment petition to the ICC, the normal practice was to fix everything. This accomplished two things. First, it dulled the usual opposition argument that the railroad had deferred mainenance so much that service had become uncompetitive and shippers had been "forced" to shift to trucks. Secondly it inflated costs and the ability to show a big loss.
The big loss part is important, because in the pre-Staggers days, just being able to show a line lost money was not enough to get abandonment permission. The railroad had to show that the losses were large enough to be a burden on the operation of the balance of the railroad. That burden on interstate commerce had to be greater that the value of the local "public convenience and necessity" associated with keeping the line operating.
The process was done by lawyers, and had only the vaguest relationship to real economics (or logic for that matter). Yes it would appear strange to normal people. But for railroaders (and their regulators) it was just normal business practice, done over and over.
A friend of mine took over the north end of the Northwestern Pacific after SP had planned to abandon it, and found the track to be in probably the best condition the line had ever been in. Because SP had been preparing it for abandonment.
And this is just the tip of the iceberg of nonsense created by ICC regulation! Which is why regulation cost the transportation industry and indirectly consumers billions in unnecessary costs over the years.
JBW
