This electronic circuit is a telephone hybrid. It is intended to be used to create an easy connection beetween telephone line and studio equipment. Connect the two wires of the telephone line to the tip and ground of the line input and connect the telephone itself to the phone output on the tip and ground only.
Now the hybrid is interfaced (fully balanced) between your telephone and its connection to the outside world. The hybrid is now capable of splitting the send and return signals. Connect the hybrid balanced audio input to a (preferabie) balanced output of around +4dBu. This output has to be the mix of all signals except the signal coming from the hybrid itself to avoid feedback. An Aux. output will do, or in broadcast mixers a modified cleanfeed is the best.