This is mostly from my own memory, supplemented by what my father told me. Until, roughly, the end of the war, Philadelphia, no small town, actually had two competing telephone systems. The first was Bell and the second was called Keystone. The latter was pretty much used only by businesses (for B2B communication) because Bell didn’t allow businesses to have unlimited service and it was worth it to subscribe to two different phone services if you could make all the calls you wanted on one of them. At the end of the war, Bell bought Keystone and (my memory could be faulty here) promised to continue to operate it, but soon closed it. If you had a private phone, there were three price points: party lines (but I think only 2 parties), limited private lines (you paid for each call), unlimited private line. I still remember my grandmother getting a call for one of her neighbors who didn’t have a phone.
Now, for numbers. An exchange was literally that. It dealt with 10,000 number because they used a 100 x 100 plug board. If each socket was 1/2" x 1/2", that would make the board a bit over 4’ x 4’, but the spacing was likely a bit closer. If your number was GRAnite 3277 (as ours was) you were in the Granite exchange and your socket was in the 32nd row of the 77th column or vice versa. If you called another number in the Granite, say GRAnite 5555, the operation would actually run a wire from your socket to his. If you called SHErwood 1234 (my grandmother was in the Sherwood exchange, although I don’t recall her number), the operator would have connected to Sherwood and run a plug from my socket to Sherwood’s while the Sherwood operation would run a plug from their connection to 1234.
To be precise, this is what would have happened if we hadn’t had dial phones, although I have no memory of this. In my earliest memories, we had dial phones and relays at the exchanges automatically carried out the functions of the old operators. By my time, the operators were mostly used for long distance.
Now to dial us from anywhere in the city, you would dial GRA3277. But they were running out of numbers and, rather than dreaming up new exchange names, they split the existing exchanges. I recall GR2, GR4, and GR6. We of course became GR23277 (so our number didn’t change). A couple decades later they were again running out of exchanges so they went to 7 digits which allowed unpronounceable exchanges.
Now, I have to dial ten digits to make local calls. Of course, I now push buttons (although I still have one dial phone in service and you can still dial). They still charge extra for push buttons although it is clear that they are saving a lot of money on it. There was a moderately high rise building downtown that used to filled with relays that has been emptied, gutted and now being turned into condos. And the power to run all those relays must have been enormous.