During the time period of 1820 to 1840, many issues influenced the development of democracy. Some of these issues include the Jacksonian economic policy, changes in electoral politics, the second great awakening, and westward movement. However, the two issues that had the greatest effect on developing democracy were the Jacksonian economic policy and changes in electoral politics. Through President Andrew Jackson's economic policy, the country was faced with the Panic of 1837. Through the many changes in electoral changes, the future of democracy was greatly changed. .
The National Bank was seen by Jackson as a major opponent. He thought that the Bank helped only the rich and was owned only by the wealthy, therefore giving them power over the poor. In order to reduce the Bank's economic power, Jackson announced in October of 1833 that federal funds would no longer be held in the Bank of the United States. He ordered Roger Taney, Chief Justice of the Supreme Court, to withdraw all federal money from the bank. With that money, thirty-three "pet banks" were set up all over the country and the money was then deposited into them. This later presented a problem because these pet banks were using their own script for money. Speculators would then buy federal land and pay with this special money form, which was basically useless. In repose to this, Jackson issued the Specie Circular, which stated that land could be bought only with money that is directly backed by gold and/or silver. As a result of this, many banks failed, cotton prices plummeted, many business entered bankruptcy, and there were many unemployed people. This then became known as the Panic of 1837.
Soon after Jackson took office in 1828, he set into effect what is called the "spoils system". This system can be described by "To the victor go the spoils". This means that Jackson had the right to make his staff whoever he wanted. Jackson made more staff changes than any other United States President.