Birth of Sevens from USASevens.com

from USASevens.com:

Seven-a-side rugby began in 1883 to raise money for the Melrose RFC, a well-known Scottish border side. The club had experienced financial problems and raising the annual dues or increasing the price of a pint was not going to solve the chronic problem of shortage of funds.
Enter into rugby history, Ned Haig, local butcher and Melrose club member, who conceived of a tournament that would attract other clubs to play a shortened version with seven players on each team. The monies would come from spectators paying admission, and also increased pub revenues generated by the participation of eight sides, accompanied by their fans.

Melrose RFC kept the rules the same as fifteens, and the size of the pitch also conformed to the standard rugby union size. The two significant changes were the total game time (fifteen minutes) and the reduction to seven players. (Back then, the first seven-a-side teams comprised a full-back, two, quarter-backs, and four forwards.)

The action-packed day was April 28, 1883, when Melrose hosted seven other border sides. To make it more interesting for fans, the event included foot-races, a drop-kick contest, and dribbling races. And there was lots of rugby playing during the day, highlighted as “The Football Competition.” Some 1,600 spectators, many arriving via special event trains, witnessed the historic match. The tournament started at 12:30 and ended seven hours later. The Ladies of Melrose donated a silver cup that continues to be awarded to the winner.

In 2011, the winning side in the Melrose Sevens – now an international event broadcast by the BBC – turned out to be the Melrose RFC.