It was a very simple relay set by a change in polarity.
When you dropped in the coins (2 nickels or a dime, the phone held one nickel until it got a second one) the passing coin(s) pushed on a lever that turned on the line to the transmitter. The only involvement of the CO was a polarity switch from the CO that operated a relay that turned off the transmitter, thus resetting the line. This meant that both the pay phone and CO gear was much simpler and cheaper.
All long distance calls (short and long haul) were handled by the operator. You wouldn't deposit money until the desired party answered.
The more conventional pay phone had a holding area above the coin box and return slot. That meant CO equipment had to track supervision (answer or no answer) and keep or return coins accordingly when the caller hung up. I believe the keep/return signal to the pay phone was a 100 volt signal and either polarity or ground indicated where the coins were to go.
As an aside, in the 1970s they had fully _manual_ (no dial) payphones in Poconos (Penna) resorts. This made sense since most calls from a resort guest would be long distance and the area didn't have TSP/TSPS, so an operator would be required to complete the call anyway.
(Mountain Bell used computers to augment toll and assistance cord boards in the 1970s, a common Bell System practice to stretch old equipment's usefulness and efficiency. While the operator still worked cords to connect and disconnect the call, the computer likely handled timing and ticketing automatically and the operator could likely dial almost all calls directly using a modern keypad.)
While "Airplane" was intended to be a spoof of the Airport series of movie dramas, it was based on Hailey's scripts of "Flight into Danger" of 1956 and "Zero Hour" of 1957 (See IMDB: