NEW YEAR'S DAY is the 100th anniversary of the birth of America's first spymaster, William J. Donovan. He founded and led the Office of Strategic Services, the World War II intelligence organization from which is descended the Central Intelligence Agency, in whose entrance hall his portrait hangs. (January 1 is also, curiously enough, the birth anniversary of the 20th century's two other most famous spymasters: Admiral Wilhelm Canaris of Nazi Germany's Abwehr, born in 1887, and J. Edgar Hoover, who maintained a host of informers for his FBI, born in 1895.)

Perhaps to commemorate Donovan's birth, two new biographies of him are being published within a few months of one another. (Thomas F. Troy's book is not a biography but an indispensable organizational study.) Both biographies tower over Corey Ford's inadequate sketch of 1970, but Anthony Cave Brown's The Last Hero is markedly superior to Richard Dunlop's Donovan.

In part this is because Cave Brown is a more fluent, more colorful, and better organized writer; Dunlop's OSS section is a confused jumble of anecdote and quotation. In part it is because Cave Brown is more objective; Dunlop, a former OSS member, writes what often seems like a panegyric, with Donovan not merely at the focus of the story but apparently running the war. And in part it is because, while Dunlop has assiduously interviewed ex-OSSers and pored through documents at dozens of libraries and archives, Cave Brown was given, by a Donovan associate, the microfilm made by Donovan himself of his director's files.

The richness and volume of this documentation have more turned the World War II portion of the book into a narrative of OSS operations than kept it a biography of Wild Bill Donovan. But this is not unwelcome. For not only is Cave Brown's account highly readable, not only does it replace such previous histories of the OSS as R. Harris Smith's, but it provides the best survey of America's first spy agency in action likely to be available for some time -- and one enjoying the great advantage of the perspective of the director.

That man was not, despite the titles of these two books, either a spy or America's last hero. Rather, he was a brave soldier and failed politician who, even if he had never headed OSS, would probably have had a biography written about him -- though by a Ph.D. candidate.

Born and raised in Buffalo, he went to Columbia Law, married an heiress, and began a successful legal career. During World War I, he rose to command the Fighting 69th Regiment and won the Congressional Medal of Honor. By the end of the war, he had become the nation's most decorated soldier, and as Cave Brown observes, "with General Pershing and Sergeant York, one of the three American war heroes."

His fame attracted wealthy clients. It contributed to his service in the Justice Department and to his being chosen as the Republican candidate for New York governer in 1932 (he lost to Herbert Lehman). But it was not enough to get him named attorney general or secretary of war in Herbert Hoover's cabinet. High political office was never again offered him. His destiny lay elsewhere.

In 1919, he had taken the first of many fact-finding trips for presidents and clients. He penetrated by rail halfway into Soviet Russia from the east at the time of the American intervention in Siberia, and Dunlop may be correct when he suggests that "the taproot (of the CIA) reached back to this train and this man." The next year he spent eight months in Europe forvic J.P. Morgan Jr., meeting key politicians and social leaders. This and subsequent trips gave him exceptionally wide acquaintanceship aboard, and was of the reasons that President Franklin D. Roosevelt sent him in 1940 and 1941 to gather information in a Europe at war.

Donovan had wanted to command a division in the struggle in which he feared America would soon be enmeshed. But his success on these trips, together with his energy, his integrity, his insatiable curiosity, his intelligence, and the appearance of nonpartisanship afforded by his membership in the opposition party led Roosevelt to choose a highly visible personality to head a secret service. On July 11, 1941, Roosevelt appointed Donovan the first Coordinator of Information, "with authority to collect and analyze all information and data, which may bear upon national security . . . and to make such information and data available to the President . . ." The organization that he set up later became the OSS.

Heading it climaxed Donovan's public life, and Cave Brown tells about a number of OSS cases that, because papers on them reached Donovan's files, apparently were regarded as some of the most important.

The "Penny Farthing" network in southern France reported in 1944 on such matters as the rail route of the SS division Das Reich towards the Normandy invasion beaches, enabling its movement to be disrupted. Other of its information at the time of the invasion of southern France inspired a rare British tribute to the OSS, calling its intelligence for that operation "probably the finest and most detailed of any." An OSS unit talked the commander of the German forces isolated in Cherbourg into surrendering. Roads and bridges were blown up in Greece.

Not every OSS effort succeeded. The "Vessel" reports out of Italy, which dealt with Japanese peace feelers and included some secret conversations of Pope Pius XII himself, were submitted to Roosevelt -- and then were determined to be fakes by an embarrassed OSS.

It is to Cave Brown's credit that he lists the failures. On the other hand, he sometimes exaggerates OSS's impact. He claims that a team sent to Hungary in 1944 to induce that Axis partner to quit the war was "at least a catalyst that forced Hitler to invade Hungary with precious armored divisions dragged from other crucial fronts." The problem with this is that while the three men parachuted into Hungary on March 13, the order to occupy was, according to the war diary of the German armed forces high command, issued on March 12.

Moreover, Cave Brown's accuracy comes into doubt in areas where this reviewer has detailed knowledge. In four pages on Canaris and the German high command, six errors occur. The Treaty of Versailles, for example, never forbade Germany to have an intelligence service, nor was Ferdinand (not Kurt) von Bredow head of the Abwehr when assassinated in 1934.

Neither Cave Brown nor Dunlop assesses the overall contribution of OSS to the war effort. The reason may be that it could not have been very great. OSS had only a handful of agents in Germany, as Joseph Persico made clear in his Piercing the Reich, and they reported mainly low- level intelligence; neither Cave Brown nor Dunlop go into this. OSS had no agents in Japan or her captured areas. And OSS's Research and Analysis Branch, which may have provided useful information, is scanted in these books.

The spy failure was not that of OSS alone. With two exceptions (Hotsumi Ozaki, who reported via Richard Sorge to the Soviet Union that Japan would not attack it, and "Cicero," whose reports to Germany from the British embassy in Turkey helped stave off British demands in the Balkans for a few months), no belligerent had high-level spies during World War II. The great intelligence successes were the Allied solutions of Japanese and German cryptosystems that contributed to such strategic victories as Midway and the Battle of the Atlantic. But it should not be surprising that the spy was of no more importance forvice in intelligence than the foot soldier was in combat during the battle of technologies that was World War II.

The consequence of Donovan's noncontrol of cryptanalysis was, as Cave Brown notes, that he "lost the battle of secret intelligence, and his service was not to recover from that defeat." This perhaps played a role in President Harry S Truman's refusal to continue Donovan after the war as head of civilian intelligence. But Donovan bequeathed to the CIA its basic organization and a tradition of strong analysis. It is his greatest legacy.

The complicated evolutions that led to the creation of that agency are well told in the study by Troy, a 30-year CIA veteran and now editor of the useful Foreign Intelligence Literary Scene newsletter. Though his subject matter is intrinsically less exciting than that of the biographies, his concentration on the personalities involved and their often bitter infighting makes his book far livelier than the usual scholarly work. And, based as it is on CIA and other documents, it is one study of intelligence that merits that often overworked term: "definitive."