A real shame, because it is (or was) a nice watch. It looks as if it got very wet at some point, and then was left standing with some water still in it while the watch was in an upright position. Consequently there is heavy corrosion of the movement in a localised area, and lighter corrosion on the steel parts everywhere else.
These pocket watches, particularly the steel ones like this, are not worth a great deal, so the cost of repairs (if repairs are possible) may well outweigh the value of the watch. However, many of the gold-cased versions got melted down for scrap, which means that it may be possible to find an uncased movement from the period (1930s) which could fit your watch.
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