The incumbent candidate, trim and good-looking in his dark suit, was affable and articulate as he addressed his audience of conservative businessmen, whose support he expects because he believes he is in tune with their problems and because many see no reason to turn him out of office.

He is against any form of tax increase and favors a strong national defense and a balanced-budget constitutional amendment. He believes that the way to reduce the federal budget deficits is to stimulate economic growth, cut the waste and fraud out of federal spending and get big government off the people's backs.

The government is "involved in the nation's business a lot more than I would like," he said. The name of Walter F. Mondale never passes his lips.

Who is this man? President Reagan? Some Republican Reagan clone running on Reagan's coattails in this state where the president has a 16-point lead?

No, it's Rep. Ben Erdreich (D-Ala.), a freshman and the first Democrat elected to the House from this district in 20 years. Erdreich may not be trying to run on Reagan's coattails, but one has to search pretty far down the list of economic issues to find one on which he disagrees with the president.

This and the South's post-World War II history of splitting its ticket between Republican presidential candidates and state and local Democrats are the reasons southern Democrats are not in despair this election season.

Neither party is predicting substantial congressional gains in the region.

Most analysts give the Republicans a good chance of picking up three or four House seats at most in the South, while the Democrats are said to have an equal shot at gaining as many as three.

Most observers here say Reagan's coattails will be worth 3 to 5 points at most, unless he wins in a landslide. Many southern politicians contend that if Mondale can win more than 40 percent of the popular vote, he can mostly nullify the help Reagan will give Republican candidates.

"If Mondale wins 43 or 44 percent of the vote, we're okay," one southern state Democratic Party chairman said last week. "But if he comes in with only 38 or 39 percent, God knows what might happen."

Thus, Democratic Party officials are keeping a close eye on Erdreich's race because they believe that if he goes under, then a good many others may also be swamped.

Most polls show Reagan running as much as 30 points ahead of Mondale in most of the 13 southern states -- Virginia, West Virginia, North and South Carolina, Georgia, Florida, Alabama, Mississippi, Louisiana, Arkansas, Texas, Kentucky and Tennessee.

In the Birmingham News poll published over the weekend, Reagan had a 16-point lead over Mondale in Alabama. In a Birmingham News poll taken a month ago, Erdreich, 45, led his Republican challenger, former state legislator J.T. (Jabo) Waggoner, 47, by 55.2 percent to 31.5 percent.

There are other coattail factors besides Reagan's, however.

In Alabama, Democratic Sen. Howell Heflin is the overwhelming favorite over former representative Albert Lee Smith Jr., a Birmingham Republican, whom Erdreich defeated two years ago, and Republicans worry that voters who have gone for Reagan might switch over to vote for Heflin and not bother to switch back. In North Carolina, party officials worry more about the effect of the bitter Senate race between Sen. Jesse Helms (R) and Gov. James B. Hunt (D) than about Reagan.

The Republicans' best prospects to gain seats appear to be in North Carolina, which has spirited races in six of its 11 congressional districts, and in Texas, where they hope to win the seat being vacated by boll weevil Democrat Rep. Kent R. Hance, who unsuccessfully ran for his party's Senate nomination.

In North Carolina, the Republicans contend that Democratic Rep. Ike Andrews in the 4th District (Raleigh, Chapel Hill) is vulnerable to William Cobey Jr., a management consultant from Chapel Hill, who lost by about 5,400 votes to Andrews in 1982. They also have hopes of ousting Democratic Rep. James McC. Clarke in the 11th District (Asheville) and Democratic Rep. Robin Britt in the 6th District (Greensboro).

"The heat really isn't on in the House races," said North Carolina Democratic Chairman David Price. "It's not like 1972, which is the benchmark. The party was weak then. Now we have support programs for our candidates -- money, professional help, voter contact and turnout programs, things like that."

The Democrats see their best prospects in Texas, Arkansas and Mississippi. In Texas, they hope to regain the seat of Rep. Phil Gramm, who is running for the Senate. The district is historically Democratic and went Republican only when Gramm changed parties. The Democrats have a strong candidate, former state representative Dan Kubiak.

In Arkansas, the Democrats are fighting for the seat being vacated by Rep. Ed Bethune (R), who is running for the Senate. In Mississippi's 2nd District (the delta), they hope that state Rep. Robert G. Clark, a black who narrowly lost a race for the seat two years ago, can unseat Republican Rep. William W. Franklin now that the district has been redistricted so that blacks constitute a 53 percent majority.

The Democrats also are bullish about winning the open seat in North Carolina of Rep. James G. Martin (R), who is the GOP candidate for governor. The Democratic candidate is D.G. Martin, a Charlotte attorney, who benefits from having the same last name as the popular incumbent. Although the district has been Republican for the last two decades, the Democrats say D.G. Martin is leading his Republican opponent, retired supermarket executive J. Alex McMillan, by 8 to 10 points in the polls.

Both parties have slighter hopes for a scattering of other races. The Republicans have designs on the seat held by Erdreich, who has responded by going to great pains to distance himself from the national ticket.

He was asked recently if he supported Mondale and vice-presidential nominee Geraldine A. Ferraro.

"I'm a national Democrat, and I support the national Democratic ticket," he responded. "I don't see, though, how my campaign gets intertwined with other folks' campaigns. I think we have individual races and individual positions on issues that the people want to hear."

This approach has Erdreich walking a political tightrope because it reportedly has angered some black leaders, such as Birmingham Mayor Richard Arrington, who persuaded blacks to vote for Gov. George C. Wallace (D) two years ago and think whites should reciprocate on behalf of Mondale.

Waggoner, a good ol' boy state legislator, hopes to capitalize on this and his past dealings with black state legislators from Birmingham to get 10 or 12 percent of the black vote.

But primarily he tries to paint Erdreich as being "too liberal for this district" and campaigns against House Speaker Thomas P. (Tip) O'Neill (D-Mass.) about as much as he does Erdreich.

"Erdreich is a typical tax and spend, big government Democrat who has voted for $128 billion in tax increases and favors weakening our defenses," he said last week. "I won't be a puppet and lackey for Tip O'Neill when I go to the Congress."

But the two didn't sound very different at an appearance before the Young Men's Business Club. Both opposed raising taxes to reduce budget deficits. Both favored a flat income tax and balanced-budget amendment. Both were for spending cuts, economic growth and limiting steel imports to 15 percent of the market. And both endorsed building the MX missile, the B1 bomber and the Trident submarine.