I rather doubt laser beaming taps were on the go in '74. However, allowing for the fact that they had to be installed in the victim's phone and that somehow harry wouldn't see it when the took his phone apart (it could have been in the body, not the handset), the harmonica bug seems like a good bet. I quote:
"This is a type of eavesdropping (spying) device that has been used with great success throughout the Cold War, and is still in use today. Known by other terms, such as "third-wire tap", "infinity transmitter", and "hookswitch bypass", a Harmonica bug turns a telephone into a microphone so that the occupants of the room the phone is in can be spied upon. The reason that it is most commonly referred to as a "harmonica" bug is that it is acoustically activated by a pitch pipe(s) or whistle(s) tuned to a specific frequency (or frequencies). (Variations also exist that are activated by application of a control signal.)
To operate one, the snoop must install the device in the victim's phone, and then call the target's phone when he/she wishes to eavesdrop. While the call is connecting, the snoop plays the activation note, so that the device in the target phone is activated before the phone can ring. At that point the phone line is open with the phone still on the hook. (In some cases, the phone may ring once, and the snoop may have to bluff a wrong number to get the victim to hang up again.)
That's why in some movies that show the old "dial" phones, a person will turn the dial a number or two and stick a pencil into it to keep it partially turned. (Gorky Park with William Hurt is one example.) This takes the phone offline, blocking all incoming calls."
But as others have said, it doesn't really matter. It's the fact that he was bugged, not how, that cracked Harry up.
Be seeing you
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