Young Blonde Girl With An Old Telephone

Early telephones were technically diverse. Some used a liquid transmitter, some had a metal diaphragm that induced current in an electromagnet wound around a permanent magnet, and some were "dynamic" - their diaphragm vibrated a coil of wire in the field of a permanent magnet or the coil vibrated the diaphragm. The dynamic kind survived in small numbers through the 20th century in military and maritime applications where its ability to create its own electrical power was crucial. Most, however, used the Edison/Berliner carbon transmitter, which was much louder than the other kinds, even though it required an induction coil, actually acting as an impedance matching transformer to make it compatible to the impedance of the line. The Edison patents kept the Bell monopoly viable into the 20th century, by which time the network was more important than the instrument.
Early telephones were locally powered, using either a dynamic transmitter or by the powering of a transmitter with a local battery. One of the jobs of outside plant personnel was to visit each telephone periodically to inspect the battery. During the 20th century, "common battery" operation came to dominate, powered by "talk battery" from the telephone exchange over the same wires that carried the voice signals.
Early telephones used a single wire for the subscriber's line, with ground return used to complete the circuit (as used in telegraphs). The earliest dynamic telephones also had only one port opening for sound, with the user alternately listening and speaking (or rather, shouting) into the same hole. Sometimes the instruments were operated in pairs at each end, making conversation more convenient but also more expensive.
At first, the benefits of a telephone exchange were not exploited. Instead telephones were leased in pairs to a subscriber, who had to arrange for a telegraph contractor to construct a line between them, for example between a home and a shop. Users who wanted the ability to speak to several different locations would need to obtain and set up three or four pairs of telephones. Western Union, already using telegraph exchanges, quickly extended the principle to its telephones in New York City and San Francisco, and Bell was not slow in appreciating the potential.