Suppose that Joe and Sue are neighbors out on the country. The year is 1950. But it could also be 1975. Or even 1999. Even though they live next to each other, and can see each other through the windows, there is still a non-trivial distance between them, especially in winter time with lots of snow and coldness. They don't fancy constantly putting on clothes and walking over to knock on the other's door to ask something.
So, they have a habit of calling each other on the telephone for convenience when they need to ask something and don't feel like going outside for whatever reason. They did consider using two tincans with a string between the houses, but they thought it looked too childish, and they couldn't figure out a good way to signal for the other person to pick up their tincan. So they use the normal telephone.
Regardless of the year, they are using the "POTS" (Plain Old Telephone System).
When Joe calls Sue or Sue calls Joe, being neighbors, would the signal first travel down to some telephone company far away, and then back to the other person? Or would they get a direct connection going straight through the telephone wire right to the other house and into their telephone?
I've tried to understand how telephones work all my life, but never quite managed, so I really don't know if this is a stupid question.
It sounds reasonable to me that, given the extremely short distance between the two parties, the signal will travel instantly between them, not triggering any kind of "log" at the telephone company's equipment (thus being free of charge) and also won't allow anyone to tap into this call remotely, unless they are right there between their houses with a physical thing hooked onto the telephone poles' wire.
Is this a correct assumption by me? Would it be free and private due to the extreme proximity? And if so, when would it stop being free and private? How many houses or what distance triggers a different "route" and the ability for remote wiretapping?
Again, please note that I'm not talking about whatever digital system is in place now, but what used to be the case with the old telephone system.