A federal appellate tribunal should bar the public when it hears argument Sept. 13 in Chicago on the suppression of a Progressive magazine article attacking government secrecy on the workings of the hydrogen bomb, the Justice Department contended yesterday.

"In light of the extreme sensitivity of the material at issue, the appropriate course is to hold the entire hearing in camera, the department said in a motion filed in the 7th U.S. Circuit Court of Appeals.

The motion drew strong reactions from the American Civil Liberties Union, counsel for the magazine's editors, and Paul L. Friedman, a Washington lawyer for freelance writer Howard Morland, who wrote "The H-Bomb Secret-- How We Got It, Why We're Telling it."

"That's outrageous," ACLU Legal Director Bruce J. Ennis Jr. told a reporter. "I don't think the government wants the public to know how desperate its constitutional and legal position is."

He recalled an episode in 1971 when the government asked the Supreme Court to hear in camera oral arguments involving security matters in the Pentagon Papers case. By 6 to 3, the justices denied the request, saying that in lieu of in camera argument the government could submit written papers under seal.

That is what the Justice Department could do about materials it deems to be classified in the Progressive case, Ennis and Friedman said. "Our basic position is that there's been too much secrecy in this case already, and we believe that the argument ought to be public," Friedman said.

Both men were especially concerned that there be open argument on the constitutional issues arising from the issuance by a federal judge in Milwaukee March 26, of the first preliminary injunction in American history to restrain publication of speech said to be protected by the First Amendment. Both men also said that safeguard procedures were available to the appeals court if the need arises to shield sensitive materials.

The government's three-page motion recalled that the preliminary injunction and an accompanying protective order forbid any public reference that might confirm the accuracy of published, but speculative and unconfirmed, materials relating to the design of thermonuclear weapons.

Lawyers for the magazine have suggested a hearing that would be closed for sensitive materials but open for other aspects.

The suggestion "lacks merit," the department said, warning that the procedure "retains the risk that counsel or the court will make an inadvertent disclosure of restricted data either explicitly or by confirming the accuracy of a particular item of previously published speculation."