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Yoshihiro built Matsumae castle that same year, and made it the primary seat of governance and administration for his newly-renamed Matsumae clan. The shogunate granted the clan exclusive rights and responsibilities by the shogunate for overseeing relations with the Ainu, management of the vast northern frontier zone, and defense of the realm against threats from the north. However, unlike all other daimyô clans, the Matsumae were not formally enfeoffed in any designated territory, nor associated with a specified ''[[kokudaka]]'' (numerical ranking of power or wealth based on a presumed rice productivity of their land).

Yoshihiro built Matsumae castle that same year, and made it the primary seat of governance and administration for his newly-renamed Matsumae clan. The shogunate granted the clan exclusive rights and responsibilities by the shogunate for overseeing relations with the Ainu, management of the vast northern frontier zone, and defense of the realm against threats from the north. However, unlike all other daimyô clans, the Matsumae were not formally enfeoffed in any designated territory, nor associated with a specified ''[[kokudaka]]'' (numerical ranking of power or wealth based on a presumed rice productivity of their land).

For most of the Edo period, the Japanese continued to directly control very little of the island. The island was essentially divided into two parts in the minds of the Japanese authorities. The area most immediately controlled by the Matsumae clan was known simply as ''Matsumae chi'' (松前地, lit. "Matsumae lands"), while the rest of the island was called Ezo-chi (蝦夷地, lit. "Ezo lands"). Guardposts stood at either end of the border between the two, which ran from Kameda in the east to Kumaishi in the west.<ref>Morris-Suzuki, "Creating the Frontier," p5.</ref> Initially, trading rights within Ezo-chi were divvied up between major vassals of the Matsumae clan, with each vassal family receiving rights to a given portion of land. Beginning in [[1717]], however, these rights began to be sold to wealthy merchants, who began to move farther and farther north. The first trading post in the [[Kuril Islands|Kurils]] was established at [[Kunashir]] in [[1754]], and the first on [[Sakhalin]] in [[1790]]. The expansion of these merchant operations was mainly along the coasts, and up into the northern islands, and not into the interior of Ezo, which remained largely unexplored (by Japanese).

For most of the Edo period, the Japanese continued to directly control very little of the island. The island was essentially divided into two parts in the minds of the Japanese authorities. The area most immediately controlled by the Matsumae clan was known simply as ''Matsumae chi'' (松前地, lit. "Matsumae lands"), while the rest of the island was called Ezo-chi (蝦夷地, lit. "Ezo lands"). Guardposts stood at either end of the border between the two, which ran from Kameda in the east to Kumaishi in the west.<ref>Morris-Suzuki, "Creating the Frontier," p5.</ref> Initially, trading rights within Ezo-chi were divvied up between major vassals of the Matsumae clan, with each vassal family receiving rights to a given portion of land. Beginning in [[1717]], however, these rights began to be sold to wealthy merchants, who began to move farther and farther north. The first trading post in the [[Kuril Islands|Kurils]] was established at [[Kunashir]] in [[1754]], and the first on [[Sakhalin]] in [[1790]]. The expansion of these merchant operations was mainly along the coasts, and up into the northern islands, and not into the interior of Ezo, which remained largely unexplored (by Japanese). Goods were regularly shipped from Matsumae-chi to other parts of Japan and to Ryûkyû through the ''[[kitamaebune]]'' shipping network, among others. Goods from Hokkaidô which were brought to ports along the [[Sea of Japan]] coast, in the [[Inland Sea]], and [[Osaka]] were chiefly marine goods, including herring, [[konbu]] (seaweed), and the like. These goods then circulated further throughout the archipelago, making it even as far as Ryûkyû, and via Ryûkyû, to China, as [[tribute]] goods. Meanwhile, goods traveling in the other direction, from Osaka and elsewhere to the Inland Sea, the Sea of Japan coastal ports, and Hokkaidô, were myriad, and included [[rice]], [[salt]], textiles, [[sake|saké]], [[candles]], dried fish, [[soba]] noodles, [[sugar]], [[indigo]], oil, charcoal, and [[tea]],<ref>''Mitarai tsûshin'' 御手洗通信 no. 3, August 1998, p2.</ref> as well as [[Chinese medicine]] ingredients obtained from China via Ryûkyû.

Japanese and Ainu engaged in trade, with the Ainu providing items such as furs, fish, hawks for [[takagari|hunting]], and items obtained from the Asian continent, as well as a category of maritime goods known as ''[[Nagasaki tawaramono]]'' which included things such as [[abalone]] and [[sea cucumber]]. In exchange, Ainu received [[lacquer]]ware, swords, iron tools, and other Japanese craft-goods. Many of these Japanese craft-goods were actually rather out of reach for the average Japanese peasant of the time, so the fact that Ainu had access to them is actually quite significant.<ref>Tessa Morris-Suzuki, "The Frontiers of Japanese Identity," in Stein Tønnesson and Hans Antlöv (eds.), ''Asian Forms of the Nation'', Psychology Press (1996), 45.</ref> Ainu chiefs also met with the Matsumae lords, and with shogunate officials, in two separate audience rituals, known respectively as ''[[uimamu]]'' (J: ''omemie'', "audience") and ''[[omusha]]''; both of these rituals included the exchange of gifts, and thus resembled [[tribute|tributary]] relations to some extent. However, samurai authorities explicitly did not recognize the Ainu as a sovereign people, i.e. as a country, in the same way that they recognized Korea, China, or [[Ryukyu Kingdom|Ryûkyû]]; instead, Japanese rhetoric of the time emphasized the notion of the Ainu as living under the protection (撫育, ''buiku'') of the samurai authorities, and represented these rituals as indicating Ainu gratitude for that protection.<ref>Arano Yasunori, "[http://www.nippon.com/en/features/c00104/#back03 Foreign Relations in Early Modern Japan: Exploding the Myth of National Seclusion]," Nippon.com, 18 Jan 2013.</ref>

Japanese and Ainu engaged in active and extensive trade with one another, with the Ainu providing items such as furs, fish, hawks for [[takagari|hunting]], and items obtained from the Asian continent, as well as a category of marine goods known as ''[[Nagasaki tawaramono]]'' which included things such as [[abalone]] and [[sea cucumber]]. In exchange, Ainu received [[lacquer]]ware, swords, iron tools, and other Japanese craft-goods. Many of these Japanese craft-goods were actually rather out of reach for the average Japanese peasant of the time, so the fact that Ainu had access to them is actually quite significant.<ref>Tessa Morris-Suzuki, "The Frontiers of Japanese Identity," in Stein Tønnesson and Hans Antlöv (eds.), ''Asian Forms of the Nation'', Psychology Press (1996), 45.</ref> Ainu chiefs also met with the Matsumae lords, and with shogunate officials, in two separate audience rituals, known respectively as ''[[uimamu]]'' (J: ''omemie'', "audience") and ''[[omusha]]''; both of these rituals included the exchange of gifts, and thus resembled [[tribute|tributary]] relations to some extent. However, samurai authorities explicitly did not recognize the Ainu as a sovereign people, i.e. as a country, in the same way that they recognized Korea, China, or [[Ryukyu Kingdom|Ryûkyû]]; instead, Japanese rhetoric of the time emphasized the notion of the Ainu as living under the protection (撫育, ''buiku'') of the samurai authorities, and represented these rituals as indicating Ainu gratitude for that protection.<ref>Arano Yasunori, "[http://www.nippon.com/en/features/c00104/#back03 Foreign Relations in Early Modern Japan: Exploding the Myth of National Seclusion]," Nippon.com, 18 Jan 2013.</ref>

Japanese merchant operations in Ezochi focused not only on trade but also on agriculture. The 18th century in Japan saw a great expansion in the growing of cash crops, including cotton, something which was implemented in Ezochi as well. A kind of fertilizer made from herring and called ''kinpi'' (金肥) was found to be quite effective, and herring-related operations expanded dramatically in the mid-1700s. Wajin settlement during this period remained extremely sparse and thin, however, compared to the extent of the Japanese population in Hokkaidô today. Still, as Wajin traders, fishermen, trappers, and the like made further inroads into Ainu lands, and as various sorts of exploitative economic structures were established and developed, tensions grew, occasionally erupting into outright clashes or revolts.

Japanese merchant operations in Ezochi focused not only on trade but also on agriculture. The 18th century in Japan saw a great expansion in the growing of cash crops, including cotton, something which was implemented in Ezochi as well. A kind of fertilizer made from herring and called ''kinpi'' (金肥) was found to be quite effective, and herring-related operations expanded dramatically in the mid-1700s. Wajin settlement during this period remained extremely sparse and thin, however, compared to the extent of the Japanese population in Hokkaidô today. Still, as Wajin traders, fishermen, trappers, and the like made further inroads into Ainu lands, and as various sorts of exploitative economic structures were established and developed, tensions grew, occasionally erupting into outright clashes or revolts.