Originally Posted by
Dromikaites
You're spot on! The general public is not aware the Nazis were ideologically internally divided between what we would call "socialism" and "capitalism". That would have been yet another reason for the party to break up, personal rivalries aside.
While a lot of leaders and rank and file were locked up, they were still alive in 1939 when Hitler dies. The military leadership can only gain by freeing them, because a fragmented parliament makes it easier for them to run the country via the office of the president of the republic.
Even in Hitler's mind in 1945 the republican structures were still alive, hence he appointed Doeniz president not chancellor (=prime minister). That would have been more so the case in the German psyche in 1939. Given the constitutional powers of the German president, it's obvious the military would be extremely interested in reinstating the office and putting one of its leaders in charge.
It is worth noting the relation between the army and the Social Democrats has been good in the past. They got more votes than the Communists in the last free elections and given everybody expects the economy to tank, it's best for the army to prop up a moderate left in the parliament instead of relying on the volatile Nazi left.
Also judging by the Spanish experience, at that time fresh in everybody's minds, it would be better to have a "managed" parliamentarian political life as a means of a "safety valve" instead of allowing a free political competition which would be likely to result in political violence like it did in Spain.
This is why I expect the military to keep it simple: secure the president office, restore the political parties as a "safety valve" while stomping any attempt at organizing paramilitaries irrespective of those being left wing or right wing.
There's also another aspect to be considered. Both the Social Democrats and the Communists had lots of members and sympathizers still free. In the original timeline they formed various underground organizations in the German Resistance.
Therefore in the unlikely case the generals do not release those imprisoned by Hitler, there are still enough people able to start an insurrection once the economy goes south.
Well, it was also in their interest to keep Poland as a bulwark against the Soviets.
Given the economists and businessmen of that time were aware bad times were ahead, the smartest move for Germany would have been to use the existing and the newly acquired industrial bases in Austria and the Protectorate to sell industrialized goods to Eastern Europe.
Those countries were in the process of building their own industries and German capital goods were highly appreciated.
In the original timeline in 1938 the Romanian king sent an economic delegation to London to ask the British to invest in developing the Romanian industry. The delegation pointed out that if the British would refuse, Romania would be forced to turn to Germany for assistance.
The British refused. In the '90s the British documents were de-classified so we know the reasons why. The main reason was at the time the European market was highly fragmented due to protectionism and therefore the British investors were skeptical the Romanian industrialized goods would find a large enough market for their investment to be recuperated. The second important reason was at the time only 3 hard currencies mattered: the pound sterling, the French franc and the US dollar. It was highly unlikely the Romanian exports would generate high amounts of payment in any of those high currencies, therefore it was highly unlikely the dividends of the British-Romanian companies would be convertible in pounds sterling. The third reason for refusal was because developing a Romanian industry would reduce the exports of the British industrialized goods to Romania. At the time the main Romanian source of pounds sterling was oil exports and those pound sterling were used to import British goods.
In the original timeline the Germans took a different approach than the British: they were willing to provide capital goods in exchange for the Romanian oil and grain and were also willing to invest in developing the local industry.
The German rationale was that given the gap between Germany and Romania, there was a lot of money to be made by building the less developed country up while owning a large piece of that country's companies in the process.
There was no need for the German investors to worry about payments in pounds, francs or dollars because the German plan was to turn Central and Eastern Europe into a single market where the trade was done in Reichmarks. The richer that single market became, the better for the German economy and for the German political standing. The British and the French by locking up the markets of their colonial empires were pushing the Central and Eastern Europeans, Turkey, China and South America into Germany's wide open arms.
In this context the Polish market was extremely valuable for Germany therefore I seriously doubt with the exception of Hitler and a handful of like-minded loonies there was anybody else interested in alienating the Poles.
The Poles themselves, being unable to export freely to the British, French, Italian, Dutch, Portuguese, Spanish or Japanese colonial empires had only Germany and Central and Eastern Europe left to trade with. Given the Reichsmark was the only valuable currency of the area it would not have taken long for the Poles to join the single market Germany was building in the region.