How does he deal with it?
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Upon his first battle Henry is torn between fighting like a man and running like a coward to save his life. Henry maintains this internal struggle throughout the book,
"At times he regarded the wounded soldiers in an envious way. He conceived persons with torn bodies to be peculiarly happy. He wished that he, too, had a wound, a red badge of courage."
Henry will get his badge of courage but not before much soul searching and baptisms of fire on the battlefield. It really isn't until the end when Henry is able to put his fear and courage into a more realistic context.