I am currently planning to develop a J2EE website and wish to bring in 1 developer and 1 web designer to assist me. The project is a financial app within a niche market. 

I plan to keep the source closed. However, I fear that my would-be employees could easily copy the codebase and use it or sell it to a third party. The app development will take 4-6 months, perhaps more, and I may bring in additional employees after the app goes live. 

But how do I keep the source to myself. Are there techniques companies use to guard their source?

I foresee disabling USB drives and DVD writers on my development machines, but uploading data or attaching the code in email would still be possible.

My question is incomplete. But programmers who have been in my situation, please advice. How should I go about this? Building a team, maintaining code-secrecy,etc.

I am looking forward to sign a secrecy contract with the employees if needed too.
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Update

Thank you for all the answers. I certainly won't be disabling all USB ports and DVD writers now. But I think I should be logging activity(How exactly should I do that?) I am wary of scalpers who would join and then run off with the existing code. I haven't met any, but I have been advised to be wary of them. I would include a secrecy clause, but given this is a startup with almost no funding and in a highly competitive business niche with bigger players in the field, I doubt I would be able to detect or pursue any scalpers.

How do I hire people I trust, when I don't know them personally. Their resume will be helpful but otherwise trust will develop only with time.

But finally even if they do run away with the code, it is service that matters after the sale is made. So I am not really worried for the long term.

You need to trust your developers.

Virtually all professional developers won't steal your source. It's understood that if you work for somebody else, it's the employer that owns the code that you write. Developers might copy code for reference purposes, but it's highly unlikely they will offer it for sale to anyone else. If they did offer it for sale to a new employer then the likely outcome is them being shown the door and possibly even arrested (as Bob Murphy points out in his comment). Getting caught isn't worth the risk.

More importantly, distrust breeds distrust. Disabling USB ports and DVD writers will engender a feeling of distrust which will, paradoxically, make it more likely that the developers will copy the code.

By all means add a secrecy clause to your contract, but it's probably unnecessary to highlight it as the most important part of the contract. 
