Ayn Rand said something that looks to be very troubling and wrong. She once said that the Indians did not have the concept of property or property rights, they didn't have rights to the land, and there was no reason for anyone to grant them rights they had not conceived of, and were not using. She said "you can't claim one should respect the "rights" of Indians, when they had no concept of rights and no respect for rights".
This is very troubling from Rand, not only because it comes off as callous, but it opens the door to being able to violate the rights of others, simply because they don't know of rights, or don't have the intelligence to conceive of such a thing.
This is also troubling because what happens with those that simply don't have the ability to conceive of rights or use rights like children or mentally handicapped people? Consistent with what she says, can you violate the rights of others, if those people cant conceive of, understand or create said rights?
First, note that in your quotation of Ayn Rand (which I am taking at face value), she said "they had no concept of rights and no respect for rights." You went on in the rest of your question to focus on the "no concept of rights" portion, but neglected the "no respect for rights" portion. This is highly relevant.
There is no reason to afford the protection of rights to persons who do not respect others' individual rights. If you will not respect others' rights, you cannot claim the protection of rights for yourself. This is not because of some kind of metaphysical reciprocity principle or the like, but rather simply reflects the fact that it is not in anyone's best interest to respect the rights of brutes who completely refuse to respect the rights of others.
Thus, if it were true that none of the Native-Americans would respect rights, then Rand is completely correct that they should have no claim to the protection of rights. (Miss Rand was factually wrong that Native Americans as a whole did not respect rights, and thus her ultimate conclusion about them was wrong. However, this is an error of being misinformed about the specific facts relevant to Native Americans, rather than a flaw in her theory of rights in general.)
Understanding the above requires a more in depth exploration of the theory of individual rights according to Objectivism. Many non-objectivists or new students of Objectivism mistakenly believe that Objectivism adopts a natural-rights type theory of rights. However, this is not correct. While there are certain similarities between natural rights theory and the Objectivist theory of rights, there are important differences as well. Please read Craig Biddle's article Ayn Rand's Theory of Rights for important clarification on this issue.
One difference between Natural Rights theory and Rand's theory of rights that is particularly pertinent to this question is that Natural Rights theory holds that rights are inherent in each person--that each person, merely by virtue of being a person, has a set of rights--whereas Rand's theory holds that rights are moral principles that guide people's actions and these moral principles arise from observations of the facts of reality, and, as all principles are, they are contextual. It is the contextual nature of rights that is the key to answering this question.
I assume that the questioner is familiar with Rand's moral theory, and thus I will not try to explain it here. Suffice it to say that rational egoism requires the discovery of and adherence to moral principles that guide one's actions. Some of these principles are purely personal, but others are directed toward our interactions with others. In the context of interacting with others, the question arises about how one should treat others and expect to be treated in return; the principle of Individual Rights answers some aspects of this question. All moral principles under Rand's theory of rational egoism are justified by the fact that adherence to the principle promotes the long-term happiness/flourishing/life of Man(i.e., is in Man's "best interest"). Thus, the moral principle of Individual Rights is valid because, as Rand repeatedly demonstrated, it is not in your long-term best interest to violate the rights of others, and, conversely, that it is in your best interest to respect the rights of others. In particular, she showed that there is immense value to be had by interacting with others in a rational, rights-respecting manner, and conversely that no value can be had long-term by interacting with others in an irrational rights-violating manner.
Thus the reason to respect rights is not because they are some mystical thing that each person intrinsically "has", but rather because it is in your best interest. However, this raises the question of whether it really is always in your best interest to respect rights. It is not. While all moral principles are absolute within their context, they are contextual and when their context no longer applies, the principle may no longer be valid. In other words, you can be sure that respecting others rights is in your best interest when you are in the appropriate context, but when you are not in that context it may not be in your best interest to do so.
In establishing that it is in fact true that it is in your best interest to respect the rights of others, there is a specific context that has to be kept in mind. That context relates to the type of interaction that leads to your best-interest. While most people can be an immense value to you, it is clearly false that all people are of value to you---those who deal with others by initiating force against them clearly do not add value to your life or promote your long-term flourishing, and it is not in your long term best interest to interact with them in a rights-respecting manner. Thus, the proof that respecting the rights of others is in your best interest has an important caveat that the "others" referred to are not rights violating brutes. Thus, there is no moral obligation to respect the "rights" of rights-violating brutes, since doing so is not in your best interest and morality demands that you act in your best interest. When someone renounces reason and acts as an animal, then the only way to deal with them is as an animal.
"Man gains enormous values from dealing with other men; living in a human society is his proper way of life—but only on certain conditions.... One does not and cannot “negotiate” with brutality, nor give it the benefit of the doubt." “What Is Capitalism?” Capitalism: The Unknown Ideal, 17.
--> Note, the above is a general discussion of the theory of rights, and should not be taken as an endorsement of Rand's view about the Native Americans. As I already said, she was factually wrong that none of them respected rights. Moreover, generalizing about an entire group of people is always perilous.
For those who may not already know, the reference to statements from Ayn Rand comes from the book, Ayn Rand Answers: The Best of Her Q&A, edited by Robert Mayhew, in a long answer to the provocative question, "When you consider the cultural genocide of Native Americans, the enslavement of blacks, and the relocation of Japanese Americans during World War Two, how can you have such a positive view of America?" (pp. 102-104.) The discussion of Native Americans consists of a very long paragraph covering most of p. 103 and part of p. 104. Ayn Rand's view of the history of American Indians is succinctly encapsulated in the following, near the beginning of the paragraph:
I believe, with good reason, the most unsympathetic Hollywood portrayal of Indians and what they did to the white man. They had no right to a country merely because they were born there and then acted like savages. The white man did not conquer this country. And you're a racist if you object, because it means you believe that certain men are entitled to something because of their race. You believe that if someone is born in a magnificent country and doesn't know what to do with it, he still has a property right to it. He does not.
Additional information about American Indians can be found in the Wikipedia article on "Native Americans in the United States." In my understanding, most of the American Indians were not peaceful, settled farmers living in the Neolithic (post agricultural revolution) era; far from it. The Wikipedia article mentions that "'Neolithic' is not generally used to describe indigenous cultures in the Americas, see Archaeology of the Americas." (This appears in the History section, Pre-Columbian subsection.) The nomadic hunter-gatherer (Paleolithic) lifestyle was especially predominant, as far as I know, among the various tribes that caused the most trouble for European settlers.
On the question of how property rights to land and similar natural resources are originally established, refer to Ayn Rand's article, "The Property Status of Airwaves," in CUI Chap. 10, especially the material on land ownership.
Note, also, that Objectivism regards man's rights as individual rights, attributes of individuals, and Objectivism rejects any idea of "collective rights" (such as "tribal rights") apart from the rights of individuals voluntarily associating together. Objectivism upholds the idea of "National Rights" of free countries, as explained in that topic in The Ayn Rand Lexicon:
A nation, like any other group, is only a number of individuals and can have no rights other than the rights of its individual citizens. A free nation—a nation that recognizes, respects and protects the individual rights of its citizens—has a right to its territorial integrity, its social system and its form of government. The government of such a nation is not the ruler, but the servant or agent of its citizens and has no rights other than the rights delegated to it by the citizens for a specific, delimited task (the task of protecting them from physical force, derived from their right of self-defense) . . . .
Nomadic tribes trailing behind vast migrating animal herds do not constitute a "nation," much less a free nation.
The article by Craig Biddle referenced in Eric's Answer provides a good discussion of the whole topic of man's rights, and the Lexicon topic of "Individual Rights" provides additional valuable insights. But to my knowledge, the clearest presentation of the basic conceptual framework for individual rights in Objectivism appears in Galt's Speech in Atlas Shrugged, and that essential framework is repeated in VOS and CUI articles as well as in Craig Biddle's article. Galt's Speech provides a substantial discussion of ethics, leading into a discussion of the moral status of man using physical force against others (p. 149 in the Signet paperback edition of FNI):
Whatever may be open to disagreement, there is one act of evil that may not, the act that no man may commit against others and no man may sanction or forgive. So long as men desire to live together, no man may initiate -- do you hear me? no man may start -- the use of physical force against others.
The discussion continues with explanation and description of what physical force does to man's mind and thus to his life, "destroying man's capacity to live." So far, this discussion is still on the level of ethics -- initiation of physical force against others as morally evil. A few paragraphs later, the discussion shifts to the use of physical force in retaliation (p. 150):
It is only as retaliation that force may be used and only against the man who starts its use. No, I do not share his evil or sink to his concept of morality; I merely grant him his choice, destruction, the only destruction he had the right to choose: his own.
It is the issue of physical force, as a moral issue, that leads to the concept of individual rights in a social context (pp. 204-206):
You who've lost the concept of a right, you who swing in impotent evasiveness between the claim that rights are a gift of God, a supernatural gift to be taken on faith, or the claim that rights are a gift of society, to be broken at its arbitrary whim -- the source of man's rights is not divine law or congressional law, but the law of identity. A is A -- and Man is Man. Rights are conditions of existence required by man's nature for his proper survival. If man is to live on earth, it is right for him to use his mind, it is right to act on his own free judgment, it is right to work for his values and to keep the product of his work. If life on earth is his purpose, he has a right to live as a rational being: nature forbids him the irrational. Any group, any gang, any nation that attempts to negate man's rights, is wrong, which means: is evil, which means: is anti-life....
To sum up, the issue of physical force arises first as a moral issue in relations with others. The moral status of physical force leads to the concept of individual rights in a social-political context, and to the need for a government to serve as man's agent of retaliatory physical force when needed (and to the proper functions of the government in a free, rational society). Further elaboration can be found in VOS and CUI, particularly in Ayn Rand's articles, "Man's Rights" and "The Nature of Government." Her VOS article, "Collectivized 'Rights'," discusses and emphasizes that rights are rights of individuals, not rights of "societies" (per se) or tribes or other collectives.
Update: With Ayn Rand, keep reading
Both the original question and the Answer by Eric concern some statements by Ayn Rand that may seem "troubling," "callous," or (in part) historically "misinformed." Whenever one encounters statements of that kind from Ayn Rand, the best advice I can offer is to keep reading. Try to place Ayn Rand's comments in their full context of where and when she was speaking, to whom, and how the question was expressed to her.
As I noted above, the comments by Ayn Rand in this particular case came during an extemporaneous, oral Q&A session following her 1974 talk at the U.S. Military Academy at West Point, titled, "Philosophy: Who Needs It" (PWNI). She was asked about "the cultural genocide of Native Americans," enslavement of blacks, and forced relocation of Japanese Americans during World War II. She was asked to justify having a "positive view of America" in the face of such actions.
Given the magnitude to which Objectivism upholds reason, egoism and individualism as morally ideal for man, it should not be surprising that Ayn Rand would bristle at the suggestion that American culture is no better than, if not far worse than, the primitive way of life of American Indians, especially the warriors among them who violently attacked and killed European settlers.
The first paragraph of her answer (published in Objectivist Answers, pp. 102-104) explains that "America is the country of individual rights" and certainly should not "have tolerated slavery." At one point in that paragraph, she mentions: "Historically, there was no such concept as the right of the individual; the United States is based on that concept," which logically drove America eventually to abolish slavery. She describes how the American example, in general economic prosperity as well as a civil war that ended slavery, was a major liberating influence throughout the world.
The second paragraph concerns American Indians. It was excerpted briefly above and can be found in full on the website referenced by Eric (here). She was responding, most of all, to present-day descendants of the Indians, i.e., to "the alleged complaints American Indians [today] have against this country." The paragraph ends with a return to present-day descendants of the Indians: "The racist Indians today -- those who condemn America -- do not respect individual rights." Her full argument is presented in the complete paragraph. One must consider the entire paragraph, not merely a few key sentences taken from it, to begin to understand "where Ayn Rand is coming from."
The third paragraph addresses the Japanese relocation during World War II and seems to say that Ayn Rand disapproved of it and attributed it to "the progressive liberal Democrats of Franklin D. Roosevelt," not the "defenders of capitalism and Americanism...."
For still more context, also consider the next question in the book (p. 104): "Should this country return some of the lands that were seized from the Indians under the guise of a contractual relationship?" Her answer to that was given at the Ford Hall Forum in 1976.
Again, Objectivism upholds reason, egoism, and individualism as morally ideal for man, and simultaneously opposes and rejects modern "multiculturalism," "egalitarianism," and any resulting "historical revisionism." A very revealing insight on historical revisionism appears at the end of the Wikipedia article on "American Indian Wars" in the section on "Historiography":
In American history books, the Indian Wars have often been treated as a relatively minor part of the military history of the United States and were long treated from the point of view of Americans. After 1970 younger historians took the Indian point of view in their writings about the wars [evidently striving not to judge any one culture as "better" or "worse" than any other], dealing more harshly with the U.S. government's failures and emphasizing the impact of the wars on native peoples and their cultures. An influential book in popular history was Dee Brown's Bury My Heart at Wounded Knee (1970). In academic history, Francis Jennings's The Invasion of America: Indians, Colonialism, and the Cant of Conquest (New York: Norton, 1975) was notable for strong attacks on the Puritans and rejection of traditional portrayal of the wars between the indigenous peoples and colonists.
Further context can also be found on The Ayn Rand Institute website, by searching on "Columbus" and "multiculturalism."
Note, also, that the rejection (or the not-yet-discovery) of reason as a great value in human life leaves man with no choice in dealing with others except to resort to force. Accordingly, pre-rational cultures (on any habitable continent, anywhere in the world) characteristically make war with each other all the time, on the premise of "law of the jungle," "survival of the fittest," "might makes right," and so on. If warring tribes are unequal in strength and ferocity, the stronger tribe most likely wins; if they are roughly equal, the tribes coexist, often in chronic tension and border skirmishing, in separate, defensible territories. In an implicit worldview of that kind, they have no moral-philosophical framework from which to object when stronger groups (such as Europeans seeking to establish productive settlements in a new land) come along and start to take over selected areas. Historically, the Europeans fought mightily with each other, as well. The British didn't have an easy time of it. But the spectacular achievements of the new American nation, founded explicitly on the principle of individual rights and implicitly on the underlying base of reason and individualism, are not to be denied, despite any lingering (and growing) imperfections that may remain to be resolved.