dissenting.
I dissent from a decision which, in my view, dilutes the meaning of the just compensation required by the Fifth Amendment when property is condemned by the Government. As a full understanding of the facts is necessary, I will begin by restating them.
This is a condemnation proceeding brought by the United States to acquire title to 920 of 1,280 acres of land, owned in fee by respondents, which is within the area to *495be flooded by a dam and reservoir project in Arizona. At the time of the taking respondents used this fee land as a base for a cattle operation known as a “cow-calf” ranch. A dependable source of water allowed intense cultivation of the fee land to provide the basic source of feed for the cattle. In connection with their fee land, respondents used 31,461 acres of adjacent public land on which they held revocable grazing permits issued under the Taylor Grazing Act. 43 U. S. C. § 315 et seq.1 The public land was used for grazing during favorable seasons, and roads running across the public land connected respondents’ three parcels of fee land.
The permits held by. respondents on the public land accorded exclusive but revocable grazing rights to respondents. By the terms of the Act, the issuance of a permit does not “create any right, title, interest, or estate in or to the lands.” 43 U. S. C. § 315b. Nonetheless, grazing permits are of considerable value to ranchers and serve a corresponding public interest in assuring the “most beneficial use” of range lands. Hatahley v. United States, 351 U. S. 173, 177 (1956). Respondents’ permits had not been revoked at the time of the taking, nor, so far as the record reveals, have they yet been revoked. The record also shows that only a small fraction of the public grazing land will be flooded in the dam and reservoir project. Thus, the public land which respondents assert gave added value to their fee land remains substantially intact and available for Taylor Grazing Act purposes.
The District Court allowed respondents to introduce testimony as to the market value of the fee land which took into consideration its proximity to this public *496land. In relevant part, the District Court instructed the jury as follows:
“During the course of this trial, reference has been made to grazing permits held by the defendants on public land. You are instructed that such permits are mere licenses which may be revoked and are not compensable as such. However, should you determine that the highest and best use of the property taken is a use in conjunction with those permit lands, you may take those permits into consideration in arriving at your value of the subject land, keeping in mind the possibility that they may be withdrawn or canceled at any time without a constitutional obligation to pay the compensation therefor.
“Evidence has been introduced of defendants’ use of their deeded land which is being taken, in conjunction with surrounding land owned by the United States, for which defendants have grazing permits, and land belonging to the State of Arizona, which defendants leased. In fixing the fair market value of the fee land being taken and the compensation to be awarded, you are not to award defendants any compensation for the land owned by the United States or the State of Arizona. However, in determining the value of the fee land and in awarding compensation to the owners, you should consider the availability and accessibility of the permit and leased land and its use in conjunction with the fee land taken and give to the fee land such value as, in your judgment, according to the evidence, should be given on account of such availability and accessibility of the permit and leased land, if any. You should also consider the possibility that the permits on the United States land could be withdrawn at any time without constitutional obligation to pay compensation therefor and determine the effect you *497feel such possibility, according to the evidence, would have upon the value of the fee land.” App. 26-27.
I have reproduced this extensive excerpt to underline the careful manner in which the condemnation jury was instructed. Contrary to the implication in the Government’s framing of the question in this case,2 the jury was not allowed to include "the value of revocable grazing permits.” The instruction expressly stated that “such permits are mere licenses which may be revoked and are not compensable as such.” The emphasis of the instruction was on the location of the fee land, with the resulting “availability and accessibility” of the adjacent public grazing land. I find the instruction to be an appropriate statement of the applicable principles of just compensation.
The opinion of the Court recognizes that the just compensation required by the Fifth Amendment when the Government exercises its power of eminent domain is ordinarily the market value of the property taken. United States v. Miller, 317 U. S. 369, 374 (1943). It is commonplace, in determining market value — whether *498in condemnation or in private transactions — -to consider such elements of value as derive from the location of the land. But today the Court enunciates an exception to these recognized principles where the value of the land to be condemned may be enhanced by its location in relation to Government-owned property. The Court relies on two lines of cases which, indeed, are said to go far toward establishing
“the general principle that the Government as condemnor may not be required to compensate a condemnee for elements of value that the Government has created, or that it might have destroyed under the exercise of governmental authority other than the power of eminent domain.” Ante, at 492:
Applying this new principle to the present case, the Court now holds that since the Government “created” an element of value by owning grazing land and making it available under the Taylor Grazing Act, and since it has the power to “destroy” this element of value by barring respondents and others from the land, the condemnation jury must ignore the fact that respondents' land is adjacent to public land. Under this formulation, it is quite immaterial that the grazing land remains substantially intact, and that the Government has taken no action— and none is shown to be contemplated in the record— to convert such land to some other use. The test is not whether the Government has in fact put its property to some other use or removed it entirely; rather, it is quite simply whether the Government has the power to do this.
Neither of the lines of cases on which the Court relies seems apposite. The first includes United States v. Miller, supra, in which the Court held that the Government need not pay for an increase in value occa*499sioned by the very project for which the land was condemned, and United States v. Cors, 337 U. S. 325 (1949), in which the Court held that in condemning tugboats during wartime the Government need not offer compensation for an increase in value attributable to its own extraordinary wartime demand for such craft. These cases support only the modest generalization that compensation need not be afforded for an increase in market value stemming from the very Government undertaking which led to the condemnation.
The other cases on which the Court relies, United States v. Rands, 389 U. S. 121 (1967), and United States v. Twin City Power Co., 350 U. S. 222 (1956), deal with the condemnation of lands adjacent to navigable waters. In Bands, the condemnee owned land on the Columbia River which the United States condemned “in connection with the John Day Lock and Dam Project, authorized by Congress as part of a comprehensive plan for the development of the Columbia River.” 389 U. S., at 122. Relying on the “unique position” of the Government “in connection with navigable waters,” ibid., the Court held that no special element of value could be accorded the land by virtue of its possible use as a port. In Twin City, the condemnee was holding land on the Savannah River as a potential hydroelectric powersite. The Government condemned the land as part of a major flood control, navigation, and hydroelectric project. By a bare majority vote, the Court held that the condemnee was not entitled to the “special water-rights value” of the land as a potential powersite, distinguishing other cases with the comment:
“We have a different situation here, one where the United States displaces all competing interests and appropriates the entire flow of the river . . . .” 350 U. S., at 225.
*500The water rights eases may be subject to varying interpretations, but it is important to remember when interpreting them that they cut sharply against the grain of the fundamental notion of just compensation, that a person from whom the Government takes land is entitled to the market value, including location value, of the land. They could well be confined to cases involving the Government’s “unique position” with respect to “navigable waters.” 3 At most, these cases establish a principle no broader than that the Government need not compensate for location value attributable to the proximity of Government property utilized in the same project. In Rands, as in Twin City, the river adjacent to the property condemned was the focal point of the development project which led to the condemnation. The Government simply decided to put the river to a new use and in connection with that new use condemned adjacent land.
To understand why compensation is not required in such cases, it is important to distinguish the Government’s role as condemnor from its role as property owner. While as condemnor the Government must pay market value, as property owner it may change the use of its property as if it were a private party, without paying compensation for the loss in value suffered by neighboring land.
*501When the Government condemns adjoining parcels of privately owned land for the same project, it may not take advantage of a drop in market value of one parcel resulting from the decision to condemn another. When, however, as in Bands and Twin City, a project encompasses not only parcels of private land, but also the public property which enhances the value of the private land, a more difficult question is presented. In each of those cases, the Government held a dominant servitude over the flow of a river, and it condemned adjacent private lands in connection with a decision to exercise its servitude. Arguably, the measure of compensation for the taking of the private lands should have included the value of the riparian location unaffected by the Government’s decision to exercise its own rights in the river. But this result would have impinged on the Government’s right to use the river by raising the cost of any new use which required the condemnation of private land.
Accordingly, in those cases the Court excluded evidence of riparian location value since the Government was exercising its lawful power to appropriate “the entire flow of the river.”
“The proper exercise of this power [over navigable waters] is not an invasion of any private property rights in the stream or the lands underlying it, for the damage sustained does not result from taking property from riparian owners within the meaning of the Fifth Amendment but from the lawful exercise of a power to which the interests of riparian owners have always been subject.” United States v. Rands, 389 U. S., at 123.
In any event, the present case is quite different. Respondents’ lands were condemned not because the Government as property owner decided to put its grazing land to some other use and needed additional land, but *502rather because the Government wanted respondents’ land for a project which left the grazing land substantially intact and available.4
The Government’s role here is not an ambiguous one— it is simply a condemnor of private land which happens to adjoin public land. If the Government need not pay location value in this case, what are the limits upon the principle today announced? Will the Government be relieved from paying location value whenever it condemns private property adjacent to or favorably located with respect to Government property? 5 Does the principle apply, for example, to the taking of a gasoline station at an interchange of a federal highway, or to the taking of a farm which in private hands could continue to be irrigated with water from a federal reservoir? The majority proposes to distinguish such cases with the “working rule” that
“there is a significant difference between the value added to property by a completed public works project, for which the Government must pay, and the value added to fee lands by a revocable permit *503authorizing the use of neighboring lands which the Government owns.” Ante, at 492.
The Court can hardly be drawing a distinction between Government-owned “completed public works” and Government-owned parks and grazing lands in their natural state. The “working rule” as articulated can, therefore, only mean that the respondents’ revocable permit to use the neighboring lands is regarded by the Court as the distinguishing element. This is an acceptance of the Government’s argument that the added value derives from the permit and not from the favorable location with respect to the grazing land.6 The answer to this, not addressed either by the Government or the Court, is that the favorable location is the central fact. Even if no permit had been issued to these respondents, their three tracts of land — largely surrounded by the grazing land — were strategically located and logical beneficiaries of the Taylor Grazing Act. In determining the market value of respondents’ land, surely this location- — whether or not a permit had been issued7• — -would enter into any rational estimate of value. This is precisely the rationale of the District Court’s jury instruction, which carefully distinguished between the revocable permits “not compensable as such” and the “availability and accessibility” of the grazing land. It is this distinction which the Court’s opinion simply ignores.
Finally, I do not think the Court’s deviation from the market-value rule can be justified by invocation of long-*504established “basic equitable principles of fairness.” Ante, at 490. It hardly serves the principles of fairness as they have been understood in the law of just compensation to disregard what respondents could have obtained for their land on the open market in favor of its value artificially denuded of its surroundings.8
I would affirm the judgment of the Court of Appeals.
In addition, respondents grazed their cattle on 12,027 acres of land leased from the State, but this land is not relevant to the controversy now before us.
As stated by the Government, the question presented by this ease is:
“Whether the owner of land taken by the United States is entitled to have included in the measure of his compensation the value of revocable grazing permits on adjoining federal land issued under an Act of Congress which specifies that such grazing permits create no 'right, title, interest, or estate in or to the lands.’ ” Brief for United States 2.
More accurate, in light of the District Court’s instruction, is respondents’ statement of the question:
“Whether, in determining the compensation due an owner of land taken by the United States, the jury may consider the availability and accessibility of public lands, so long as consideration is also given the possibility that the grazing permits on the public land may be withdrawn.” Brief for Respondents 1-2.
Arguably, then, these are water rights eases and nothing more. Suitable sites for hydroelectric plants or port facilities are important natural resources, highly valuable but limited in number, over which the Government has peculiar historical and constitutional sway. On this view, while the Government has equal authority over Taylor Grazing Act land and other Government-owned property, proximity to such property may appropriately be treated differently from proximity to navigable water for the purpose of measuring just compensation. This was one of the bases on which the court below distinguished the water cases from the present case, 442 F. 2d 504, 507 (CA9 1971), and in my view is an alternative ground for affirming the judgment below.
In two eases decided together involving the condemnation of ranch land used in connection with Taylor Grazing Act land, a panel of the Court of Appeals for the Tenth Circuit followed a similar analysis in awarding location value in one case, United States v. Jaramillo, 190 F. 2d 300 (1951), but not in the other, United States v. Cox, 190 F. 2d 293 (1951). In Jaramillo, the court stated:
“By appropriate condemnation proceedings . . . the Government took appellee’s fee and leased land as a part of a total of 20,061 acres, to be used for war purposes. But, unlike the Cox and Beasley cases, the 'project did not contemplate the acquisition of the forest land covered by appellee’s permit.” (Emphasis added.) Id., at 301.
If so, the contrast between condemnation proceedings and other transactions would be stark: the enhancement of value stemming from public highways, paries, buildings, and recreational facilities is commonly recognized for purposes of taxation, mortgaging, and private sales.
See n. 2, supra.
Even if, as the Government’s argument suggests is possible, the permits held by respondents had been withdrawn as a prelude to this condemnation, the Taylor Grazing Act contemplates their issuance in the public interest and the record discloses no other private landowners as favorably located to qualify for permits as these respondents.
Respondents’ witnesses valued the land at figures up to nearly a million dollars, while the Government’s expert witness assigned it a value of $136,500. In what was manifestly a compromise, the jury awarded $350,000.