Alexander Graham Bell invented the telephone. It was pretty
useless until he invented another one so they could talk to each other. Then
he invented a third one. When he went to call it, it was engaged.
-Attributed to Irish comedian Dave Allen.
The earliest telephones were point-to-point, that is, they could only talk
to each other. This was clearly not going to suit most users. Although the
earliest switchboards were generally for a single business inside their own
premises, it soon occurred to Alexander Graham Bell that some telephone users
may wish to talk to others who were not part of their organisation. So the
telephone exchange or Central Office was begun, using a switchboard designed
by George W. Coy. The first one was at New Haven in Connecticut in 1877 or
1878 and cost the District of New Haven Telephone Company forty dollars, including
switchboard
and furnishings. The idea wasn't new - similar switching was already available
on the telegraph system. This quickly gave rise to an important new innovation
- the Telephone Directory. The first New Haven directory listed fifty subscribers,
but did not yet have telephone numbers. Operators were expected to remember
the numbers of the subscribers. As the system grew rapidly this could obviously
not be sustained, so numbers were soon added to the Directory.
A better ringer using a hand cranked magneto generator was invented by Thomas Watson, as the total line distance could now exceed what the earliest signaling systems could handle. (Bell's original telephone had no signaling whatever - you attracted the attention of the person at the other end by tapping on the phone with a pencil). The magneto generator led to this type of system being known as "Magneto" .
The Switchhook was invented to put the bells across the line when the phone was not in use, and to put the speech circuit and battery on the line when it was in use.
Because of the distance, wet cell batteries were installed at the customer's premises in addition to the ones at the exchange. The early cells were of glass, filled with liquid chemicals. They needed regular maintenance and this added to the overall cost of a telephone service. Failure of the wet cells was common through a number of causes, and eventually the dry cell battery with which we are now familiar was invented and introduced for telephones.
TELEPHONE
LINES
Early phone lines were single-wire - a steel or copper wire carried the signal, and it was earthed (grounded) at both ends. This did not allow signals to be carried over long distances. It also picked up interference from all the other electrical devices that were earthed in the neighborhood, like passing electric trams and other electrical motor devices. The background electrical noise became so bad that in major cities the phone could be almost unusable.
The solution was to go to two wires in a long loop from the exchange, through the telephone, and back to the exchange again. Unfortunately this meant twice as much wire and the city skylines were soon black with thick masses of wire running over the rooflines. City telephone exchanges had massive structures on their roof to support the thousands of wires needed. The picture shows the cable frame on top of the KTAS exchange in Jorcks Passage, Copenhagen.
The wires to the customers were mounted on poles attached to roofs, chimneys, the front of shops, and poles along streets. They were noisy in the wind, broke under the weight of snow and ice,and were extremely ugly. The complaints from residents increased, and local Councils and Corporations started exerting pressure on telephone companies to tidy them up and find another way of reaching their customers. The problem was that for many years there simply wasn't an alternative, and by now people were not going to do without a telephone. The overhead wires were also fairly cheap to erect, which appealed to the telephone companies.
As an economy measure, party lines were introduced. This put a number of telephones across the same wire or pair of wires. Each user had a "code ring" that corresponded to a letter in the Morse code that identified a call to their phone. Operators had to learn these codes and crank out the appropriate code. Since all the phones shared common wires, there was no secrecy on party line calls. Many attempts were made to squeeze more phones onto a party line, but ultimately the only answer was to provide more wires. Country areas sprouted lines of poles carrying dozens of wires on crossarms.

Left: Telephone "tree", Sydney, around 1912. As the number of lines grew extra crossarms were added. If the pole was no longer tall enough to hold extra crossarms, another pole could be bolted to the top of the existing one.
About this time in Sydney, many of the shops on the main streets were fitted with a special facia board that had a trough built into it to carry cables, rather than increase the pole sizes. Many other cities tried similar arrangements.
The science of building these lines became more and more specialised, and the men who built them became known as Telephone Linesmen (or "lineys"). The technical people who serviced the telephones and exchange equipment became "technicians". Previously they were all generally known as Telephone Mechanics.
Gradually, the telephone system was becoming more scientific and less agricultural. With better line building, calls could be extended over longer distances. The telegraph system was starting to feel the effects.
The invention
of cable, where a number of wires were twisted together and covered in a waterproof
sheath, helped. So did putting the cables underground in pipes or tunnels.
Most cities have large cable tunnels under the main roads and footpaths, and
these cable tunnels are still in use today,
Many of the tunnels are feats of engineering in their own right - built at comparatively shallow depths, they had to support the weight of increasingly heavy city traffic and be proof against the vibrations from underground train lines. They were natural carriers of water, so they had to be drained or pumped out. The more well-used tunnels in the larger cities had to be electrically lit. Gas from adjoining city gas pipes could seep into the tunnels, causing serious (and often fatal) surprises to the workers who had to go down into the tunnels.
Left: A "cable pit" from the late 1890s. For larger cable installations it was found easier to excavate a tunnel and support the cables along the walls, rather than feed them in pipes as shown here.

Left: Cable Tunnel , Copenhagen, 1928.
In spite of
this, most suburban areas were still served by pole-and-open-wire construction.
The conflicts between electricity lines, phone wires, cable TV cables and
trees is still largely unresolved. After WW2 some countries made efforts to
put the phone lines underground but this decision was often made on other
grounds than aesthetics. In Australia, for instance, the decision was strongly
influenced by the cost of repairs to overhead lines following storms and bushfires.
In spite of this. all new housing subdivisions were fitted with underground
lines as the value of undergrounding was proven.
The development of Internal Bearer Cable (a bundle of wires wrapped around a steel wire core to take the weight) extended the life of pole construction and it is still common today. In many areas it is simply not feasible to underground an aerial line due to the amount of infrastructure already in the ground - water and gas mains, drains, driveways, and sometimes electricity lines.
The photo above, courtesy of Marvin Hodges, is a typical U.S. streetscape of the 1950s.
SWITCHBOARDS
Back at the exchange
in the 1890s, calls were connected by an operator using a cord with a plug
at each end. As a caller rang in, a small metal plate ("shutter"
) would drop, revealing the caller's number. The operator would take one end
of a cord and plug it into a socket (jack) corresponding to their number.
The operator would ask for the number they wanted ("number, please")
by pressing a switch that cut her headset into the circuit, and partly plug
the other end of the cord into the wanted party's socket. She could hear if
there was a call in progress ("busy" or "engaged"). If
the line was not engaged, she would then crank a handle or press a key to
generate a ring to the other phone. Once the call was established she would
restore the drop shutter to its position and restore her key / switch to its
normal position to connect the two subscribers, then handle another call.
A firm called American Electric soon invented a system that rang the called
number as soon as the plug was fully inserted. thereby saving the operators
a lot of work. At the end of the call, callers were expected to "ring
off" - ring their generators to signal the operator they had finished.
She would then remove the plugs.
Although male telephonists (boys) were used in the early days, young ladies were soon found preferable as they were quieter, more stable, not cheeky to the customers, and could be paid less. The honour of being the first lady operator goes to Emma Nutt, who started work with the Boston Telephone Company in 1878. She stayed with them for 33 years. She is remembered on September 1st, Emma Nutt Day. The telephone exchange was one of the few forms of "suitable" employment for a young lady for many decades, and the girls were ruthlessly supervised. They were expected, of course, to resign on marrying.
Above Left: Early Western Electric single-position switchboard for a small Central Office. The unit hanging from the top of the board is a transmitter for the operator to talk into. It was soon replaced with the operator's "head and breast set", an early earphone and microphone set that could be plugged into a special socket on the switchboard. At the top of the board are the drop shutters to indicate an incoming call. Under these are the panel of sockets for each subscriber's line, into which the cords were plugged. The flat shelf under the sockets holds the plugs for the cords, standing upright, and the Ring / Speak keys on later models. The cords hanging from the bottom of the board are the connecting cords, weighted at the bottom so they will automatically retract back to the flat shelf when disconnected.
There is a
special place in telephone history for the operators of the little country
exchanges. A typical small wall-mounted switchboard is shown at left. These
were generally staffed by the wife of a local farmer, and many had a small
general store or Post Office as well. These jobs could provide useful income,
and many of the Telephone Office-Keeper's jobs were passed down from mother
to daughter for a number of generations. As a central point in the community,
the Telephone Office Keeper often knew just about everything about everyone.
This could be a good point or a bad one, depending on whether you were in
favour with her at the time. They also acted as coordinators in local emergencies.
I first realised their importance when, as a young clerk for the Australian
Post Office, I had to ring all the customers on a local country exchange called
Kungala to let them know that we were going to convert their exchange to automatic.
As a courtesy I first rang Mrs Cannon, the Telephone Office Keeper. She was
a third generation (I think ) TOK, and was now retiring. None of her family
wanted to take over the Telephone Office. It was a bit of an experience. She
was able to tell me who was in town at the cattle sales, who was in hospital,
who wouldn't be back home until later in the day (and she rang them and arranged
for them to ring me the next day) and who would be at the Bushfire Brigade
meeting that night. Of her thirty or so customers spread around nearly 200
square kilometres, only one said anything negative about her, and his main
objection was that he couldn't get calls through late at night after Mrs Cannon
had closed the exchange and gone to bed.
One improvement to the system was introduced steadily from the late 1890s, and was almost universal for larger exchanges by the 1920s. It allowed a bank of batteries at the exchange to power the entire system, doing away with the batteries in the customer's phone. This reduced maintenance and allowed the telephones to be made smaller. Signalling the exchange was done by simply picking up the handset. As current flowed through the phone, it turned on a small lamp on the exchange switchboard. This system was called CB, for Central (or Common) Battery. There were different versions of the system introduced by many manufacturers, each having its advantages and technical improvements. It still required a room full of operators to switch the calls, though.
In parallel with the growth of the exchange was the growth in Trunk lines. It proved relatively easy to link an area's exchanges with each other, and the system of smaller rural exchanges "parented" off a larger exchange in a nearby city started to take shape. The larger city exchange soon carried trunk lines to other major cities, and the system grew rapidly. This was also noticed by the telegraph companies, who were starting to lose revenue to the convenient new telephone. In countries like Britain and France, where the Telegraph was owned by the State, the Governments gradually took control of the private companies and started to rationalise the whole system with the aim of providing universal service - under their control. Economic arguments still rage about the benefits of Public versus Private, and there are many points in favour of each system (and just as many against).

The growth in the number of customers meant that the switchboards were getting bigger. So big, in fact, that the Divided Multiple system had to be invented in 1879 by Milo Kellogg so an operator could handle a few hundred customers and pass calls to another switchboard that handled the other party's number. The exchange was now taking on the look that it would keep for the best part of the twentieth century.
Above: The magneto switchboard of the Victorian Telephone Exchange Company in Melbourne, ca 1886.
Manual exchange, 1955. Photo courtesy Marvin Hodges.The photo gives an idea just how large (and crowded) a manual exchange could be in terms of numbers of staff. The lady standing at left is the shift Supervisor. Remember, this is only one shift. As well as the telephonists working other shifts, there were technicians, linesmen and administrative staff. The telephone company was a major employer in most communities.
The exchange was now a major building in its own right, not the small "office" of the earlier days. Typically the exchange would have a huge room full of switchboards and operators, a separate room for the power supply, generators and batteries, offices for the administrative staff, and a room for the technical and maintenance staff. The incoming cables, which could now be many inches thick, were split up and wired to a Main Distribution Frame. Technicians could test lines or connect and disconnect them at this point. A pair of wires for each phone line led from the MDF to the appropriate switchboard.

Left: Incoming cables from the cable tunnels were brought up from underground into the exchange. These cables were usually lead-sheathed and often pressurised with dry air to keep moisture out. From Poole "Practical Telephony Handbook" 1895.
Left: The cables were broken out of their sheath and each pair of wires was connected to a set of terminals on a Main Distribution Frame. The MDF also carried fuses. It allowed lines to be connected or disconnected and tested for faults. In bigger exchanges the MDF often occupied a room of its own. Pairs of wires from the MDF were led (usually overhead) to the switchboards. Photo courtesy Marvin Hodges, ca 1955.
AUTOMATIC SWITCHING
As exchanges continued to grow, it was obvious that manual switching could
not last. One comment of the 1900s was that at the present rate of growth
it would be only a few years before half the population of Britain was switching
calls for the other half. Enter Almon Strowger, a disgruntled Kansas City
undertaker who was convinced that the town telephone operator (his competitor's
daughter) was passing business calls to his rival undertaker. He invented
a practical system that allowed a caller to select
the
number they wanted to call without any intervention from the operator. The
heart of his invention, as it was finally put into production, was a switch
that had a ten by ten matrix of contacts with telephone lines wired to them.
As a user dialed a number (the dial had to be invented too) an arm with an
electrical contact would step up the rows until it reached the row corresponding
to the first digit of the telephone number. It would then step across to the
contact that corresponded to the next digit(s). The call would then pass to
another switch which would do the next digits if necessary, and so on. At
the end of the call all the switches would drop to the bottom of their travel
and be ready for the next call. This system was called step by step, and anyone
who has worked in or visited such an exchange will not forget the experience.
It was big and very noisy (noisier than a room full of operators) and it needed
regular maintenance but it worked. It also spawned a new range of inventions.
The first Strowger exchange was put into service at La Porte, Indiana, in 1892. In the first Strowger phones the customer tapped a button the correct number of times to generate the pulses that caused the switches to "step". This was soon replaced by a dial, invented in 1896.

Left: Original Strowger / Austomatic Electric 11-hole "knuckleduster" dial
The dial started out with eleven fingerholes - the extra one was to call the operators, who still had a role providing information or switching calls to other exchanges (trunk calls). This soon became the standard ten-hole dial that everyone became used to.

Left: Automatic Electric "Mercedes" dial. Slightly smaller than the standard dial's final size, it was the first dial in widespread use as the Strowger step-by-step system became popular in the early 1900s.
Automatic Electric was the company formed to market Strowger exchanges worldwide.

Left: The Western Electric No. 24 dial, British model. By now it was a standardised, high-precision device being made by many manufacturers. Some of these made minor alterations to the dial, but generally this was the standard type.
A ringer machine was invented to generate ring tone to the called telephone. Another one generated "busy" tone and "engaged".
The telephone Test Desk became more important for technician to test lines, as they no longer had the operators to handle basic trouble reports (also called Faults).
Meters were installed to keep track of the calls a customer made for billing purposes. The accuracy of these meters was often questioned by customers, but they were generally surprisingly accurate.
Automatic switching changed the arrangement of the telephone exchange. The huge manual switching centres became machinery rooms full of switches, and the number of manual operators was reduced to those required to place trunk calls and provide telephone numbers and other information. Even those remaining operators were being threatened by the next logical development. Subscriber Trunk Dialling (STD) allowed a country to be divided into zones, each represented by a numerical prefix. A subscriber could dial the STD code to switch out of their zone to the one they wanted, then dial the phone number in the other zone, and be directly connected without the intervention of an operator. It was only a simple step from here to allocate a dialling code to each country, so a subscriber anywhere in the world could dial any other subscriber. This is called ISD (International Subscriber Dialling). STD facilities were introduced early in some countries like Germany, but most development took place after the second World War.


Above Left: a typical step-by-step switch. At the top are the electromagnets which drive the stepper according to the dial pulses. At the bottom is the bank of contacts, showing the "wipers" mounted on the vertical shaft.
Above Right: Racks of switches
Smaller automatic exchanges in purpose-built buildings came into use in the 1920s for rural areas. They were a necessity in areas where the existing telephonist was about to retire, and noone could be found to take over the manual exchange. Many country areas were dotted with these little metal or wooden buildings. The British term for such buildings was RAX (Rural Automatic Exchange). In many cases the surrounding countryside was automated long before the nearest city exchange that they connected to.


Above: External and internal views of an Australian RAX. Photos: Left: Australian Post Office "Telephony 5", Right: Keith Munro

Left: Banks of step switches. They required constant cleaning and adjustment, but were remarkably reliable considering that many were well over fifty years old by the end of their life. Photo courtesy Marvin Hodges
Left: The exchange also contained test equipment for trunk lines, radio lines, and all the other equipment that tied the exchange into the national network. Photo courtesy Marvin Hodges.
Step by step was not the only switching system in production, but most fell
by the wayside. One successful contender was L M Ericsson's Crossbar system.
It used
a
rack with short bars across it almost touching another range of bars at right
angles. By rotating one of the bars slightly, corresponding to a dialed digit,
a contact on one edge could be brought into contact with another contact on
one of the cross bars, corresponding to the next digit dialed. It was quieter
and more compact than the step by step, but was somewhat slower getting started.
It was perfected after World War 2 and became a major seller worldwide until
electronic exchanges were introduced.

Left: The Lorimer Brothers of Canadian Machine Telephone invented
another style of switchgear in the early 1900s but were unable to get it reliable
enough to put into service. It was redeveloped by the Bell Telephone Manufacturing
Company in Belgium into the Rotary system, which sold successfully. In the
United States it was redeveloped into the Panel system which also had sales
success.
After the Second World War it became obvious that electromechanical switching had reached its limits. Exchanges were outgrowing their buildings, extra features were needed that electromechanical switching could not provide, and the equipment was wearing out. Attention turned to developing the transistor, whose small size and lower power consumption offered advantages. The earliest computerised exchanges were small and somewhat clumsy, but they soon matured driven by the sheer demand. Although there are still many electromechanical exchanges working around the world (and still quite a few manual ones) the future belongs to the computers.
References:
Telecom Australia "Palace of Winged Words" , undated
Poole J "The Practical Telephone Handbook" 1895
"A Textbook on Telephony" International Correspondence Schools, Scranton, 1899
Herbert T E and Procter W S "Telephony" Vol 1 1932
McMeen S G and Miller K B "Telephony" 1923
Munro K "Have You Finished" 1989
Moyal A "Clear Across Australia" 1984