Atherton says, "Nearly all of that whiskey is made north of the Ohio River," referring to "alcohol, cologne spirits and redistilled whiskey." You can't interpret that to mean aged whiskey was not made north of the Ohio River. He was speaking on behalf of Kentucky's whiskey, which was almost all "made to be aged." He had no reason to mention whiskey that was "made to be aged" if it was made outside of Kentucky. Nothing in Atherton's testimony as reproduced here can be construed to support the theory that rye whiskey was often sold "green" even in the 1880s. Did the distilleries "north of the Ohio River" have a thriving business in "ready to drink" spirits products too? Absolutely. But that without more doesn't mean they didn't also make aged whiskey.
What this evidence shows is that people in that period used the term "whiskey" to refer to products we would not call whiskey, such as GNS ("alcohol") and "cologne spirits." His "redistilled whiskey" is what we would call "blended whiskey."
Until prohibition, sophisticated drinkers in the northeastern United States considered aged rye whiskey to be "the good stuff." Bourbon was popular mostly in the West and South. The Northeast also likes its blends, such as Seagrams Seven Crown. In the Northeast to this day, Manhattans are generally made with an American Blended Whiskey like Seagram's Seven, and not with bourbon or rye.