Er, not quite...
Most signalling was done using buzzer morse, and the interception was simply a sensitive valve amplifier with the input connected to a couple of earth pins suitably spaced apart. This picked up the AC buzzer signal for a considerable distance and standard telephony was not safe either. The "danger zone" was somewhere between 3000 and 5000 yards deep.
The Fullerphone is a DC telegraph working on a very low voltage (1.5 volts from a single 'S' or 'X' cell) and it has filtering (inductors and capacitors) between the key and the output terminals. This smooths the transitions so there is no AC component for the enemy to detect. At the receiving end, the incoming (tiny) signal is converted to AC by the chopper and fed to the headphones. It really does work on tiny voltages and currents and is pretty much undetectable. The potentiometer is fitted so you can cancel out any stray voltage due to soil conditions (electrolysis of metals in the ground) and reduce any background interference. Only really a problem with earth return circuits, and they were switching to copper pairs wherever possible - again to defeat the interceptors (who could still get pickup due to leaky insulation on cables in shell holes, etc.).
Louis Meulstee has a nice page (well,
lots of excellent pages really) on the Fullerphone as well as the usual radio topics.
http://www.wftw.nl/ful.html
Chris.