The stories sounded as if they were right out of a 1930s movie: Gangs of roving youths extorting money and gifts in return for promises of leaving the neighbors in peace; women returning from the grocery suddenly surrounded by a group of teen-agers and forced to give up all their money; residents waking up to find car tires slashed and trees uprooted.

But the stories came from residents of the small Alexandria neighborhood of Warwick Village, near the Arlington County Line.

Faced with what they said was increasing vandalism and what one resident described as "terrorism," Warwick Village neighbors told the Alexandria City Council last week, they took action. They built a fence to keep the gangs out of their neighborhood.

There is one problem, say city officials: That action was just as illegal as the vandalism inflicted upon the residents.

Warwick Village residents said they decided to fight fire with fire last August, after suffering through several months of vandalism and threats from what they describe as a gang of nearly 30 youths.

The residents spent $400 of their own money to put up a six-foot chain-link -- actually three fences -- at even intervals on a path between Sycamore and Landover streets that residents say the youths used as their escape route from the neighborhood.

"The fence is an efective tool to stopping crime," said resident John Halter. "If the fence is taken down, we well find other means of combating crime. If nothing works, we will consider leaving Alexandria."

Since the fence is on city property, however, Alexandria officials say it was illegal for Village residents to put up the barrier.

The controversy highlights what police and government officials have long said is an open secret in Alexandria and other metropolitan jurisidictions: Juveniles are becoming involved in an increasing number of crimes, but when they are caught they are treated in a more gentle fashion than adults.

According to police figures from last year, people under 18 years of age were involved in nearly half of the crimes involving theft and property destruction in Alexandria.

"We're dealing with a criminal problem, even if it is perpretrated by juveniles," said council member James P. Moran Jr., who was clearly shocked by residents' description of their problems.

"Kids laugh at the system," said council member Carlyle C. Ring Jr. "They're back in school or back on the streets within minutes of their arrests. But currently there is a lot of rethinking on the subject going on in the legal profession."

Mayor Charles E. Beatley Jr. contended that the fence is clearly illegal and expressed concern about permitting citizens to take the law into their own hands. "I personally don't favor starting from an illegal basis in solving this," he said.

Some residents at the council hearing agreed with Beatley.

"Our civil rights are threatened by the existence of the fences," said Maren E. Lindberg. If residents can put fences in an alley, she said, "they can fence off Market Square" in front of City Hall.

Although Lindberg agreed that some residents were being terrorized by "gangs of kids," she contended there were other, lawful means of dealing with the problem.

Council members voted 6-to-1, with Nelson E. Greene Sr. dissenting, to delay a decision on the issue until the council receives more information from city departments. Those reports, as well as reports on juvenile vandalism throughout the city, are due at the council's Oct. 28 meeting.

In the meantime, the illegal fence will remain embedded in controversy and three feet of concrete.

"We are taking pcitures of everyone who climbs over it," Halter told the council. "We think that only half a dozen or so of the gangs actually live in the Village, but the others use it as and escape route [to Mount Vernon Avenue]."

Warwick Village was built more than 30 years ago, and most of its two-story townhouses are owner-occupied. It stands between the $150,000 homes along Russell Road and lower-priced rental units on Mount Vernon Avenue, Glebe Road and the Four Mile Run flood control area.

With its winding streets, clustered back yards and house prices that average $75,000, Warwick Village is regarded as a cornerstone to the revitalization of the Mount Vernon Avenue corridor.

"The controversy is tearing the Village apart," said 26-year-old Sean McNamara, who has lived in Warwick Village all his life. "If the fence hadn't been put up, people would have become vigilantes. It could have become violent because children were pushing them around. But it's a neighborhood like any place else.

"I'm concerned about [the vandalism], but when I was growing up I was one of those kids [that] adults complained about too."