Gramm's exit puts the South up for grabs

RUPERT CORNWELL

Washington

The demise of Phil Gramm's Presidential bid yesterday will have less effect on the outcome of the New Hampshire primary than in the big states of the South and West where the Texas Senator had based his hopes of seizing the Republican nomination.

His departure, formally announced at a press conference in his Senate office here, reduces the nominal field for Tuesday's first primary to eight. Mr Gramm's supporters are likely to transfer their loyalties to either Pat Buchanan, now the unchallenged champion of the Republican right, or Senator Bob Dole, the long-time front-runner who still appears to have a narrow lead in the state.

But the impact in New Hampshire, where Mr Gramm never moved above single figures in the opinion polls, will be modest. Where opportunity really beckons is states like Florida and especially Texas, Mr Gramm's political home and where his hard-edged economic conservatism goes down far better than in the Mid-West or New England.

Barring a comeback by Steve Forbes, the multi-millionaire publisher who came a distant fourth in Monday's Iowa caucuses, New Hampshire has turned into a three-man race between Mr Dole, Mr Buchanan and Lamar Alexander, the former Tennessee Governor and Bush Administration Education Secretary, who is the field's most recognisable moderate - though hardly the "liberal" that Mr Dole called him this week.

But the scramble yesterday was not merely for the Gramm votes. Big-name endorsements too are essential props for any candidate, and both Mr Dole and Mr Alexander wheeled out new ones yesterday. Rallying to the Senate Majority leader were Governors William Weld of Massachusetts and George Allen of Virginia, respectively the 23rd and 24th of the country's 31 Republican Governors to do so.

Mr Alexander countered with a more than useful catch of his own - Bill Bennett, another former Education Secretary but better known as author of the best-selling Book of Virtues, which has made him one of the most authoritative advocates of family values and personal responsibility, central themes of the campaign.

Mr Alexander thus boosts his credibility among social and Christian conservatives, a hugely influential bloc among Republican primary voters and one which has never taken greatly to him.

The most urgent search of all, however, is for money. Never as well financed as Mr Dole or Mr Gramm, Mr Alexander must use his surprise success in Iowa to raise new funds - and fast. Hardly had he set foot in New Hampshire than he held a conference call with 250 supporters imploring them to raise $5,000 (pounds 3,270) apiece by tomorrow.

Even Mr Dole needs more money, especially if Mr Forbes continues his advertising blitz, and the Dole campaign this week sent out 300,000 requests for cash.

But Mr Forbes' poor showing in Iowa and now Mr Gramm's early exit prove that, contrary to much wisdom, money is not everything in American politics. Mr Forbes lashed out an unheard of $4m in Iowa alone - and ended up with just 10 per cent of the vote. Mr Gramm had one of the best funded and best organised campaigns, but was simply an unattractive candidate.

Signs were emerging yesterday that Mr Forbes may also be preparing to depart the campaign if he comes to grief in New Hampshire, where only a fortnight ago his flat-tax plan had catapulted him into the lead. But his appeal is waning, and as of Tuesday he had not bought new advertising in North and South Dakota, whose primaries are on 27 February, and in South Carolina, the first southern state to vote, on 2 March.