Fun fact: ASCII was a variable length encoding. No really! It was designed so that one could use overstrike to implement accents and umlauts, and also underline (which still works like that in terminals). I.e., á would be written a BS ' (or ' BS a), à would be written as a BS ` (or ` BS a), ö would be written o BS ", ø would be written as o BS /, ¢ would be written as c BS |, and so on and on. The typefaces were designed to make this possible.

This lives on in compose key sequences, so instead of a BS ' one types compose-' a and so on.

And this all predates ASCII: it's how people did accents and such on typewriters.

This is also why Spanish used to not use accents on capitals, and still allows capitals to not have accents: that would require smaller capitals, but typewriters back then didn't have them.