We can see the wholly negative effects of war in the way that Stanhope's character has changed. We do not actually see what he was like before his war experiences but we learn a lot through what other characters say about him, and most of all through Raleigh's hero-worship of him. Raleigh remembers him as he was at school, a high-flyer admired by all the other boys, and is shocked to see the change in him as a soldier. He has become very curt and bitter in his manner, and has taken to drinking a good deal. This is his way of coping with the sheer horror of war. We see how vulnerable he really is whenever he confides in Osborne, but after Osborne is killed he retreats even further into himself. He is harshest with Raleigh because he can't bear to have Raleigh see how much he has changed. Raleigh reminds him too much of how things used to be, and so he tries to keep away from him altogether - until in the moving final scene, when Raleigh is fatally injured and he tries to comfort him. In this scene, more than any other, we see the warm, confident, easygoing man that Stanhope used to be, before the war.

How does R.C. Sherriff depict war's true horror through Stanhope in Journey's End?

The true horror of war is shown through the destabilizing effect it has on Stanhope in Journey's End.

Prior to the war, Stanhope had considerable talents.  He was a gifted student and athlete in college, and described as a "natural leader."  His gifts are ones that are valued in war. Physically, Stanhope is described as a "child" at heart and looking like a "boy."  Yet, what Stanhope experiences moves him far away from such innocence.

Sherriff shows that three years on the front have fundamentally changed Stanhope.  He is a hardened and cynical man.  He is afraid of going back home, even for a small period of time, because of his addiction to drinking.  He openly doubts his sanity.  The strength and focus that was a part of his character before the war have become absent after it.  This is where Sherriff shows the true horror of war.  It is shown as a transformative process where individuals change from what they used to be into a gutted shell representing what they are.  

Stanhope's reaction to Raleigh highlights this.  Stanhope is both scared and angry that Raleigh has joined his unit because of the truth that has emerged. The person that Stanhope once was, the hero that Raleigh worshipped, is no longer there.  War has taken it away.  Sherriff suggests that this is its true terror.