That is called a cancellation, applied when the stamp is affixed to an envelope and before it is sent from the originating post office. It is designed to prevent the reuse of a stamp and to document the city and date/time of usage. Used stamps that have been soaked off the original envelope (or cover, in philatelic terms), does not usually show all the information that the full cancellation would have shown. In this particular case, the number 7 probably refers to the particular station at the post office at which the cancellation was applied.
To get only half a cancellation (cancel) like you have is probably the result of another stamp or object being stuck over this stamp so the covering object got the other half of the cancel.
It kind of looks like a European precancel (half-circle) when you first look at it and do not consider the stamp itself.
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