THE CONGRESS' VETO of city legislation restricting embassies from locating their offices in residential areas has brought an outpouring of concern for the District's independence from the federal government. There is fear that Congress, having once again tasted its supreme power over local government, will be apt to enter into District affairs in the future. This fear is grounded in the pre-home-rule history of the city when Congress controlled the local government, often without regard for local citizens.

But the veto of the chancery law is not necessarily a return to having the overlords on Capitol Hill running the city. What it indicates is that the District government acted irresponsibly in the eyes of the federal government for the first time in five years. According to a position paper issued by the State Department, the prohibition on the location of foreign chanceries in the District could lead to "adverse actions regarding important United States interests abroad including the security of the location of our mission in more than 150 overseas areas. . . ." The State Department said the District law also violated the U.S. government's agreement to the 1961 Vienna Conference on Diplomatic Relations.

However, Mayor Marion Barry and the District Council believe they were fulfilling their primary duty in passing the chancery law: listening to the concerns of District residents who live near Embassy Row and who believe that the area is becoming over-crowded with chanceries. What the local government seems blind to, however, is that the federal government is one of its constituents. And as the city's major employer and tourist attraction, the federal government is a very important constituent. In seeking to have local laws reflect the wishes of local citizens, particularly on a matter that affects the federal government, the city council must consider the well-being of the federal government as well as that of citizens' groups.

The city council should have met with representatives of the State Department before voting on where foreign chanceries could be put. Negotiations limiting chanceries to main streets or attempts to keep them in one general area might have been possible. But no negotiations were attempted. When a similar chancery bill was considered in 1978, only a last-minute request from Secretary of State Cyrus Vance led the council to defer action on the bill. But on this latest legislation the State Department says it was not consulted.

At this point in District history, it is especially bad to have the council act so unwisely. The city is seeking full representation in Congress and would like to elminate all congressional veto powers over city laws and the budget. This incident may have hurt the District's drive for more independence. But Congress should not take this first veto as a precedent for future interventions in local matters. The city council and the mayor can help to keep the Congress out of city affairs by talking with the federal government about precisely such matters as this.