BILLY BATHGATE <i> by E.L. Doctorow (Harper & Row: $5.95) </i>

In his latest best seller, E. L. Doctorow offers a diverting study of the seductive power of evil. The title character, a boy from the Bronx slums, weasels his way into a job as errand boy to a fictionalized version of mobster Dutch Schultz. Schultz escorts Billy through the vicious, corrupt world of organized crime in the 1930s and shows him that a capacity for monstrous evil and genuine kindness often coexist. But the impulsive, violent Schultz, who rose to power during Prohibition, fails to realize that he has become an anachronism: The future belongs to Billy and a more subtle generation of con men. Although the ending, in which a thrill-seeking heiress returns from a long absence to present Billy with their child, seems more than a little improbable, “Billy Bathgate” is a skillful work by one of the country’s most popular novelists.