I started Martin Noth's History of Pentateuchal Traditions. Noth talks about his views that the redactor of the Pentateuch (or, actually, the Tetrateuch) used P as a framework for organizing his story, that E was utilized to supplement and fill out J, and that J and E have similar stories because they both draw from a common G source. For Noth, J and E are too different for E to have drawn from J, or vice versa!
Noth is a tradition-critic, which means that he seeks ancient oral traditions behind the stories of the Pentateuch. But how do we know that such traditions existed? Noth appears to address this question on page 43. He says that "most of the tradition materials in the Pentateuch were quite limited in their reference, indeed limited more to locality than to tribal history", and yet, in the Pentateuch, the stories apply to all Israel. We can see that they only talk about certain locations, and yet they are integrated into the history of the entire nation of Israel. Noth does not believe that the Pentateuch came into being by these different local narratives being combined into a national history---for the fact that the Pentateuch is being put together in the first place shows that there's already a nation of Israel, and the Pentateuch would only draw from traditions that relate to Israel as a whole. In short, these local stories are already part of a national history by the time that they reach the writers and redactors of the Pentateuch. Therefore, these traditions have a pre-history---before they became a part of Pentateuchal tradition, they were local oral traditions. There were oral traditions before there came to be J, E, and P sources---for the J, E, and P sources are telling the history of national Israel. But we can tell from the stories themselves that they were more local than that, at some point, and this was at the oral stage.
That's my impression of what Noth is saying, but I wouldn't risk my life on it. This isn't the easiest book to read! I actually missed reading about Robert Alter's literary approach to the Bible, after seeing Noth break the text up into so many pieces!
One area where I think I saw Noth's view on tradition-history in action concerned the figure of Jacob---particularly on pages 89-97. There are stories in which Jacob is on the west of the Jordan River---in Shechem and Bethel. But there are other stories in which he's East of the Jordan River---in such places as Mount Gilead, Mahanaim, and Penuel. Noth calls him the "East Jordanian Jacob." And he encompasses many of the stories about Jacob that lead us to ask how God could use such a scoundrel! The story of Esau hunting is a part of the East Jordanian tradition, for Gilead had lots of woods. Jacob tricking Laban is a part of the East Jordanian tradition, one reason being that Jacob makes a covenant with Laban in Gilead. According to Noth, these East Jordanian traditions don't focus on the land promise, for the people there weren't concerned about finding arable land, since all they had to do was expand into their wooded areas; rather, they were concerned about living life and getting along with their neighbors, and they could admire wily, rash Jacob.
(Question: Doesn't the belief in a land promise in the West Jordanian stories presume a national Israelite consciousness, even at the oral stage? I may be misunderstanding Noth in interpreting him to mean that the oral traditions were local, without a national Israelite consciousness. He does emphasize the importance of cultic traditions, after all, and those talked about the nation of Israel---its possession of the land, etc.)Noth doesn't believe that the East Jordanian traditions were all originally part of one seam, for he holds that the Jacob-Esau stories were combined with the Jacob-Laban stories. Over time, they were weaved together with the Shechem and Bethel traditions about Jacob, in which Jacob is more of a patriarch. But, according to Noth, the stories are so "interwoven" that one cannot separate them literarily---but only "traditio-historically." And I guess that Noth does this by attaching stories to the locations that they mention, and looking at the stories' characteristics: that leads him to the conclusion that there were local oral traditions, which were woven together (for some reason), until they were written down and placed in front of the redactors of the Pentateuch.