The doctors in Henry's hospital want to ship him to another hospital in Milan, mostly because they'll need every bed for casualties when the upcoming offensive begins. The night before Henry is to leave for Milan, news arrives that America has declared war on Germany. In celebration, Henry, gets drunk with Rinaldi and another major. Henry confidently predicts that the U.S. will soon declare war on Austria as well, while Rinaldi informs Henry that Catherine is also being sent Milan to work at the hospital there.
The soldiers drink whether the news is good or bad, whether they are wounded or well. Here they drink even as the hospital is emptied out to prepare for the influx of new casualties. Intoxication is a way for them to escape the realities of the war. By getting to go to Milan, which is far from the fighting, Henry and Catherine really will escape the war for a while.